Iraq Shifts Oil Strategy with First Tanker Through Hormuz in Decades

Iraq has taken a significant step in its oil strategy by arranging for a Very Large Crude Carrier (VLCC) to transport two million barrels of crude oil beyond the Strait of Hormuz. This marks the first time in decades that Iraq has sent a state-owned tanker through the strait, signaling a shift in how the country markets its oil. Ali Qais Abdul Jabbar, director general of Iraq’s state tanker company, announced the move in video comments posted on the Oil Ministry’s Facebook page.

The change in strategy allows Iraq to reach refiners who are hesitant to send vessels through the Hormuz Strait, potentially securing better prices and reducing the discounts needed to attract buyers to its southern terminals. The move comes as Middle Eastern oil producers scramble to secure tankers to restore crude and refined fuel flows following disruptions caused by the Iran war. Abu Dhabi National Oil’s shipping arm is among those expanding their tanker fleets to meet this demand.

Iraq is also exploring funding options to purchase its own tankers, according to Oil Minister Basim Mohammed Khudair. Owning vessels would give Baghdad greater control over crude deliveries and help the country compete with regional producers. The state tanker company’s push to buy tankers would support exports and increase financial returns, though the exact number of tankers Iraq plans to acquire was not disclosed.

Last month, Iraq’s crude exports averaged about 2.6 million barrels per day, up from 2 million barrels in August but still below the pre-war levels of 3.3 million to 3.5 million barrels. The country is also pursuing alternative export routes, including a northern route through Turkey and a proposed pipeline to Syria’s Baniyas port.