Iraq gets Hormuz passage as Trump threatens Iran sanctions

Infographics: TBS

Iran has granted special permission to a number of Iraqi oil tankers to pass through the Strait of Hormuz after repeated requests from Baghdad, offering limited relief to Iraq as the key energy corridor remains severely disrupted amid the ongoing Iran war.

Iran's state news agency IRNA reported on Saturday that securing permission for Iraqi oil tankers was one of Baghdad's key requests during Iranian Parliament Speaker Mohammad Baqer Qalibaf's recent visit to Iraq.

Iraqi President Nizar Amedi confirmed that Iran had facilitated the passage of vessels carrying Iraqi oil through the strait in recent days. He said Baghdad had held discussions with Iranian officials over continuing Iraqi oil exports through the waterway, although he described the situation as complicated.

Speaking at the Baghdad Dialogue policy conference, Amedi said the issue remained a major concern for Iraq as the country relies heavily on oil exports and has been particularly affected by the disruption of shipping through Hormuz.

The Strait of Hormuz, which connects the Persian Gulf with the Gulf of Oman, remains one of the world's most important energy routes. Before the conflict erupted, the waterway handled nearly one-fifth of global crude oil and liquefied natural gas shipments. However, commercial traffic has fallen sharply since the outbreak of the conflict in late February.

Only seven commodity ships passed through the strait on Thursday, according to ship-tracking data from Kpler, down from 14 the previous day. No large crude carriers or LNG tankers were recorded among those crossings, highlighting the scale of the disruption to energy shipments.

For Iraq, the disruption poses a particularly serious economic threat. The country was producing around 4 million barrels of oil per day before the war, making reliable access to export routes critical to government revenues.

With traffic through Hormuz still far below normal levels and vessels facing continuing security risks, Baghdad is accelerating efforts to develop alternative routes for its crude exports.

Iraqi Prime Minister Ali al-Zaidi said on Friday that Baghdad was working to expand oil exports through Turkey's Ceyhan port. Iraq also plans to establish export routes through Syria's Baniyas port and Jordan's Aqaba port as it seeks to reduce its dependence on the Strait of Hormuz.

The Iraqi government has also outlined more ambitious plans to increase oil production to between 8 million and 10 million barrels per day within six years. The strategy includes expanding export infrastructure so that future disruptions in the Gulf do not leave Iraq as vulnerable to a single maritime route.

The uncertainty surrounding Hormuz has also continued to push global oil prices higher.

Brent crude futures settled at $94.39 a barrel on Friday, rising 61 cents, or 0.65%. US West Texas Intermediate crude rose 23 cents, or 0.26%, to settle at $87.06 a barrel.

Brent gained 6.39% over the week, while WTI rose 5.66%. Both benchmarks had reached their highest levels since July 24 during the previous trading session.

Analysts said the latest developments could add further pressure to an already tight oil market, particularly if shipping disruptions worsen or additional sanctions are imposed on Iran.

The United States has threatened tougher economic sanctions against Iran and countries that continue doing business with Tehran. Iran, in turn, has warned that any new US measures could trigger a severe response. The two sides have not resumed negotiations after an earlier peace deal expired this week.

The immediate effect of additional sanctions on global oil supplies could be limited because Iranian exports are already heavily constrained by the US naval blockade. However, analysts warn that increased attacks on commercial vessels or retaliation over sanctions could further disrupt shipping and raise energy prices.

Iranian oil exports have already fallen sharply. Reuters reported that offers of Iranian crude to Chinese buyers declined significantly this week as the US blockade restricted shipments. China is the main destination for Iranian oil, accounting for more than 80% of Iran's exported crude.

At the same time, some alternative sources are helping offset the disruption. Increased supplies from US shale producers, pipelines and producers such as the UAE are providing additional barrels to the international market.

Still, the limited reopening of Hormuz for Iraqi tankers does not signal a return to normal shipping conditions. Rather, it highlights the extent to which access to the waterway is now dependent on individual permissions and diplomatic arrangements.

For Iraq, the immediate priority is to keep its oil exports moving. For global energy markets, however, the continued restrictions on Hormuz remain a major source of uncertainty, particularly as the conflict approaches its six-month mark.

The permission allows some Iraqi oil tankers to pass through the Strait of Hormuz, while overall shipping traffic through the waterway remains significantly below pre-war levels.