Iraq boosts crude exports via Strait of Hormuz

Iraq’s state-run Oil Tankers Company has transported 2 million barrels of Iraqi crude oil aboard a very large crude carrier (VLCC) through the Strait of Hormuz. The company described this voyage as its first such transit in decades, marking a notable operational step in how Iraqi crude reaches global markets.

The shipment underscores a renewed use of the key maritime chokepoint for Iraqi exports. While Iraq has long exported crude via the Gulf, the state tanker operator had not conducted a comparable VLCC transit through Hormuz for many years by its own account.

The director general of the Oil Tankers Company said the move represents a change from delivering crude only at the port of Basra. Instead of relying solely on loading crude at Basra for onward shipment by other carriers, the company is now directly moving large volumes through Hormuz on its own vessel.

This adjustment in logistics is presented as a way to give Iraq’s state oil marketer SOMO more options in structuring export sales. By controlling a VLCC shipment through the strait, Iraqi authorities can potentially reach a wider range of buyers and navigate different delivery points.

The company has indicated that this additional flexibility could improve sales conditions and pricing opportunities for Iraqi crude. However, specific cargo destinations, buyers, or contract terms linked to the 2 million barrel shipment have not been disclosed in the available information.

Operating its own VLCC through Hormuz allows Iraq to participate more directly in seaborne crude trades rather than depending entirely on third-party shipping. This can broaden SOMO’s ability to match Iraqi crude with demand across different markets.

By adjusting where and how crude is delivered, SOMO may be better positioned to respond to changing market conditions. The company can potentially negotiate sales linked to varied delivery points, which could influence pricing outcomes for Iraqi barrels.

In parallel with the Hormuz voyage, the Oil Tankers Company is working on expanding its fleet. It is pursuing the purchase and operation of specialized crude oil tankers designed to strengthen its role in regional and international shipping.

Iraq’s Oil Ministry has stated that it is seeking funding to acquire additional tankers for the state-owned fleet. The goal is to enhance the national carrier’s competitive position relative to other regional shipping companies that currently dominate much of the crude transport in the area.

Building a larger, specialized fleet would enable Iraq to undertake more direct shipments similar to the 2 million barrel VLCC transit through Hormuz. This would deepen state control over export logistics and could support longer-term strategies to optimize crude marketing and transport.