Iraq Is Running Out of Time to Move Its Oil — And Every Option Is Dangerous
- Iraq’s oil exports are stalled by Strait of Hormuz risks, causing an 80% production drop and full storage tanks, despite a temporary deal with Iran.
- Options to bypass Hormuz carry geopolitical trade-offs.
- Every export choice now doubles as a strategic alignment, forcing Iraq into high-stakes decisions that will shape its regional alliances and influence for years.
With over 90% of its annual budget historically coming from oil and around 95% of that black gold having to pass through the Strait of Hormuz before it is monetised, Iraq has at least as big a problem from the waterway’s closure as any country in the world. The temporary agreement it reached on 17 March with Iran that secured safe passage through the Strait for Iraqi ships has not provided the quick fix many might think. Despite the diplomatic agreement, most global shipping firms still refuse to send their vessels into the Gulf because of the sky-high insurance premiums and threat from sea mines. And Iraq’s lack of a large national fleet means it remains reliant on third-party owners. As such, despite the understanding with Iran, this lack of shipping options has led to an 80% fall in Iraq’s oil production, as its facilities to store drilled oil are now full. In short, it needs to move a lot of oil, fast. So, what are its options? Read More