Iraq Courts German Industry for Reconstruction and Proposes Direct Oil Supplies to Europe

Iraqi Prime Minister Ali Falih Kadhim al-Saidi has made a direct appeal to German industry to participate in the reconstruction and modernization of his country, floating the prospect of exporting crude oil directly to Germany as part of a comprehensive strategy to strengthen commercial and energy ties with Europe.

Speaking alongside German Chancellor Friedrich Merz during an official diplomatic visit to Berlin on Tuesday, the Iraqi leader outlined plans to expand bilateral economic cooperation. The high-level discussions centered on channeling German industrial capabilities into Iraq’s post-conflict rebuilding projects while simultaneously broadening Europe’s access to Middle Eastern energy supplies.

A core component of al-Saidi’s proposal involves establishing dedicated energy supply corridors to Western consumers, including the conceptual development of new pipeline infrastructure to transport Iraqi crude oil to Germany. The proposal reflects an intentional strategic shift by Baghdad to forge closer, direct commercial linkages with key European partners.

Historically, Iraq has directed the vast majority of its crude oil shipments toward rapidly expanding energy markets in East Asia, largely due to geographic proximity and well-established maritime shipping channels. However, the current leadership in Baghdad is actively working to alter that trade pattern by diversifying its client base and securing a stronger long-term foothold in European energy markets.

Highlighting the regional logistics of this export initiative, al-Saidi pointed to existing overland pipeline routes crossing through neighboring Turkey and Syria, while also emphasizing Iraqi ambitions to route crude supplies across the Mediterranean Sea to reach European destinations such as France. Creating resilient transit options across the region is seen by Iraqi planners as critical to executing this European trade strategy.

Underpinning Baghdad's outward push is an ambitious plan to dramatically expand domestic crude extraction. The Iraqi prime minister detailed an official target to roughly double the country's oil output, aiming to achieve production levels between 9 million and 10 million barrels per day. Under this blueprint, approximately half of that total production volume would be directed toward European and Western markets.

Al-Saidi emphasized that while Iraq is endowed with vast raw material reserves and a young, abundant workforce, the country requires advanced international assistance to maximize its economic potential. He noted that specialized technical expertise and German engineering solutions remain critical requirements for upgrading state infrastructure and rehabilitating industrial assets across the country.

Addressing potential security and investment concerns, the Iraqi leader assured business leaders that German corporations and other international enterprises can operate in a stable and reliable domestic environment. He stressed that closer ties would represent a mutually beneficial arrangement, pairing Western technical support with reliable energy export agreements.

Following the bilateral discussions, both governments formally agreed to implement a joint action plan designed to guide structured economic and political cooperation moving forward. Chancellor Merz welcomed the roadmap, affirming that Germany maintains a vital strategic interest in seeing a strong, stable, and economically prosperous Iraq emerge in the region.

Merz observed that enduring domestic stability in Iraq relies heavily on balanced internal governance, highlighting the necessity of maintaining constructive and peaceful relations between the central authorities in Baghdad and the autonomous Kurdish regional administration in the north of the country.

The German chancellor also pointed out that numerous German companies are already actively contributing to the country's development on the ground. These enterprises are currently spearheading projects across critical sectors, including the design of modern energy systems, the rollout of pioneering municipal waste management operations, and the facilitation of broader bilateral trade flows.

Demonstrating immediate commercial progress from the Berlin talks, Iraqi representatives and the German industrial group Siemens Energy formally concluded an agreement focused on electricity infrastructure directly following the joint press briefing. The deal is intended to enhance Iraq's domestic power generation capacity and help alleviate long-standing electricity supply challenges.

Despite the collaborative tone of the summit, Merz was frank about the institutional challenges that continue to deter foreign commercial ventures in Iraq. The chancellor underscored that Western corporations require predictable, dependable, and transparent operating conditions before committing long-term private capital to the Iraqi market.

Merz urged Baghdad to accelerate its ongoing campaign against systemic corruption, emphasizing that sustainable economic growth requires an efficient, transparent public administration founded on the rule of law. The German leader assured al-Saidi that Berlin remains ready to assist the Iraqi government in enacting these administrative and governance reforms.