Iraq Eyes Alternative Storage Options Amid Hormuz Shipping Woes

The Iraqi Oil Ministry is studying proposals to store crude oil in storage facilities in countries including Egypt, Oman, and Singapore. The move aims to bypass the Strait of Hormuz, where maritime shipping has been facing difficulties since the start of the military conflict involving the United States, Israel, and Iran.

In September 2025, Iraq's State Oil Marketing Organization (SOMO) signed two agreements with OQ, formerly known as Oman Oil Company, and its subsidiary, Oman Tank Terminal Company (OTTCO). The first agreement establishes a strategic partnership to develop an integrated project to store Iraqi crude oil in the Special Economic Zone at Duqm (SEZD), the largest special economic zone in the Middle East and North Africa.

To move forward with storing crude oil in Egypt, Iraq needs to complete the Basra-Haditha pipeline project, which would then extend out toward the Jordanian port of Aqaba and finally to the city of Arish in the northeastern Sinai Peninsula. The proposals are part of the Iraqi government's effort to enhance the trading value of Iraqi crude oil internationally.

Since the outbreak of the war on February 28 and the subsequent closure of the Strait of Hormuz, Iraq's seaborne oil exports collapsed to unprecedented levels. Oil exports fell to approximately 550,000 barrels per day in March, 132,000 barrels per day in April, and 98,000 barrels per day in May, before gradually rising to 2.16 million barrels per day in August.