BAGHDAD — Iraq has begun transporting its own crude oil beyond the Strait of Hormuz for the first time in decades, marking a significant shift in its export strategy as ongoing tensions in the region continue to disrupt one of the world's most important energy corridors.

According to Iraq's state media, the Iraqi Oil Tankers Company recently shipped 2 million barrels of crude oil aboard a very large crude carrier (VLCC). The move represents a departure from the country's traditional export model, in which crude is sold on a free-on-board (FOB) basis from Basra's southern terminals.

Ali Qais, director general of the state tanker company, said the initiative is designed to improve Iraq's ability to market its oil directly, enhance pricing opportunities, and provide greater flexibility in reaching international buyers.

To support the new strategy, the company is also seeking to acquire specialized crude carriers, allowing Iraq to strengthen its shipping capabilities and compete more effectively with other regional exporters.

Export Challenges Intensify

Since the outbreak of conflict involving Iran earlier this year, Iraq has faced mounting economic and logistical challenges. As OPEC's second-largest oil producer, the country relies on petroleum exports for roughly 90% of government revenue.

Before the conflict, Iraq exported approximately 3.3 million barrels of oil per day, with most shipments passing through the Strait of Hormuz after departing from Basra.

However, regional security concerns—including attacks on commercial vessels, higher insurance costs, and military tensions—have significantly complicated shipping through the strategic waterway.

Industry data from tanker-tracking firm Kpler indicate that oil flows through the Strait of Hormuz remain well below pre-conflict levels, underscoring the continued impact on one of the world's busiest energy routes.

Seeking Alternative Export Routes

The changing security environment has also increased transportation risks for vessels operating near Iraqi waters, prompting some international buyers to request deliveries outside the Strait of Hormuz.

In response, Baghdad has accelerated efforts to diversify its export infrastructure. Officials are evaluating several alternatives, including reopening the Iraq-Turkey pipeline through Ceyhan and expanding overland transportation routes toward Syria. While these projects could improve flexibility, they would initially handle only a portion of Iraq's total exports.

Oil Minister Bassim Khudair has previously stated that Iraq aims to raise its export capacity to 5 million barrels per day as new pipelines and infrastructure projects become operational, including strategic links to Fishkhabour and Baniyas, alongside continued investment in export facilities.

Long-Term Strategy

The latest shipment highlights Iraq's broader effort to assume greater control over its oil exports by managing transportation beyond the Strait of Hormuz rather than leaving buyers to bear elevated geopolitical risks.

The Iraqi Oil Tankers Company, once one of the region's largest fleet operators before decades of conflict and sanctions reduced its capabilities, is now pursuing fleet modernization as part of a long-term strategy to strengthen the country's energy sector and safeguard its most important source of national revenue