Iraq looks for oil export alternatives to the troubled Strait of Hormuz

What the report says

Iraq is seeking backup routes for its oil exports as the Strait of Hormuz remains disrupted by the wider US-Iran war, according to Al Jazeera. In a speech at the United Nations General Assembly in New York, Prime Minister Ali al-Zaidi said the closure of the strait has hit Iraq’s sea trade and deprived the country of a major source of revenue. The report said Iraq has been unable to move roughly 90% of its oil through the Gulf and has lost about $60bn in oil income since the conflict began.

The loss is significant because oil accounts for around 90% of Iraq’s federal budget. Al Jazeera reported that the decline in exports has strained the government’s ability to pay salaries and contributed to protests in Baghdad. Officials are weighing austerity measures, while also exploring longer-term changes such as increasing production and widening export options.

Possible alternatives include expanding use of the Iraq-Turkiye Pipeline, reviving routes through Syria or Jordan, and moving more crude by road to northern storage sites. Iraq and Turkiye recently signed a one-year extendable agreement for exports through the Turkish port of Ceyhan. Still, analysts cited by Al Jazeera said these options are not quick fixes and that the Strait of Hormuz remains the key route for volumes Iraq needs to support state finances.

The article also noted that Iraq’s State Oil Marketing Organization is facing weaker-than-expected sales, with discounts offered to attract buyers amid shipping risks. Overall, the situation underscores how vulnerable Iraq’s economy is to instability in a single maritime chokepoint.