ERBIL, Kurdistan Region - The crisis in the Strait of Hormuz has exposed Iraq’s reliance on vulnerable oil export routes, prompting Baghdad to seek alternatives as it works to maintain crude shipments during regional disruptions caused by the US-Iran war, the country's oil minister said Saturday.
“The Strait of Hormuz crisis has impacted crude exports; we must find solutions to prevent a recurrence,” Basim Mohammed Khudair told the state-run Iraqi News Agency (INA), adding that the country's oil fields "are ready to restore export levels to their pre-war rates."
The Strait of Hormuz, a vital waterway through which about one-fifth of the world’s energy supplies pass, has become a major flashpoint between the United States and Iran since the six-week war began in late February. Tehran has asserted sovereignty over the waterway and required vessels to obtain authorization to pass, while Washington has imposed a naval blockade on Iranian ports.
For Iraq, the conflict and disruption of shipping through the strait have dealt a major blow to the country’s oil sector and wider economy. Iraqi crude production fell from about 4.14 million barrels per day (bpd) before the crisis to 1.49 million bpd at the height of the blockade.
According to Khudair, Iraq is currently exporting between 1.5 million and 1.7 million bpd from production of around 2.7 million bpd. Before the disruption, Iraq exported about 106 million barrels of crude per month, with a large share of its exports passing through the Strait of Hormuz.
Amid the maritime crisis, Iraqi oil exports dropped to 18.6 million barrels in March, generating about $1.96 billion in revenue, compared with more than 99 million barrels and $6.81 billion in February, according to figures provided by Baghdad's oil ministry.
Iraq is now exploring alternative ways to move its crude. Khudair said that "there is an ongoing dialogue with Iran to allow the export of Iraqi oil, but it has not been implemented yet."
The government is also seeking to expand pipeline routes to reduce its dependence on maritime exports through the Gulf.
Iraq plans to build a Basra-Haditha oil pipeline at an estimated cost of $15 billion, with proposed extensions to Turkey’s Ceyhan port and Syria’s Baniyas port.
Last week, Iraq and Turkey signed an agreement to transport 750,000 bpd of Iraqi crude oil through the Iraq–Turkey Pipeline (ITP) to the Port of Ceyhan.
During Iraqi Prime Minister Ali al-Zaidi's visit to Ankara earlier this month, Turkish President Recep Tayyip Erdogan said both countries aimed to reach a comprehensive energy cooperation agreement.
“Our goal is to sign a comprehensive energy cooperation agreement as soon as possible,” Erdogan said at a joint press conference with Zaidi on Tuesday.
Erdogan also said Zaidi had told him Iraq could eventually supply Turkey with one million barrels of oil per day.
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