Iraq is searching for alternative routes to export its crude oil as the continued closure of the Strait of Hormuz disrupts maritime trade and severely affects the country’s oil revenues.
Iraqi Prime Minister Ali al-Zaidi said during the 81st United Nations General Assembly that the crisis surrounding the Strait of Hormuz had created serious challenges for Iraq and contributed to rising global oil prices.
Iraq has been unable to export about 90 percent of its oil through the Gulf and has reportedly lost around $60 billion in oil revenues since the war began. Oil income accounts for roughly 90 percent of the country’s federal budget, and the decline in exports has affected the government’s ability to pay salaries and contributed to protests in Baghdad.
The government is considering measures to reduce spending and increase revenue, while also exploring alternative export routes. These include expanding the Iraq–Türkiye Pipeline (ITP) and developing possible routes through Jordan and Syria.
However, experts say the alternatives cannot immediately replace the Strait of Hormuz.
Iraq has been using complicated ship-to-ship transfers to move some crude through Basra and other Gulf ports, with small vessels transporting oil through the strait under US military protection.
Ali Nazar, head of the Iraqi Oil Marketing Organisation (SOMO), said Iraq had an oil export capacity of about 4.2 million barrels per day in September, but actual exports averaged only 2.5 million barrels per day. Before the crisis, Iraq exported around 3.5 million barrels per day.
To attract buyers, SOMO has reportedly offered discounts of about $26.50 per barrel for medium crude and $28 for heavy crude. Nazar said finding buyers remained difficult because of attacks on vessels travelling through the strait.
Iraq is also increasing exports through Türkiye. About 250,000 barrels of crude are currently being transported daily by road from southern oil fields to storage facilities in Kirkuk, with plans to increase the volume to 750,000 barrels per day.
Last month, Iraq and Türkiye agreed to extend an arrangement allowing at least 750,000 barrels of oil per day to be transported through the Iraq–Türkiye Pipeline to the Turkish Mediterranean port of Ceyhan.
Despite these efforts, Iraqi oil industry experts say the Strait of Hormuz remains the country’s only practical route for exporting the volumes needed to maintain government revenues.
Iraqi Oil Minister Basim Mohammed Khudair warned that the situation in the strait remained highly unstable. He said Iraq’s limited oil exports could fall further if the conflict continues, adding that the country’s import and export operations depend heavily on security in the strategic waterway.
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