Iraq Deploys State Tankers to Transport Crude Through Strait of Hormuz

The Iraqi Oil Tankers Company (IOTC) transported 2 million barrels of crude through the Strait of Hormuz using a very large crude carrier (VLCC). This operation is the first of its kind for the state-owned firm in decades.

Baghdad initiated this shift to bypass export disruptions caused by the conflict between the United States and Iran. By managing its own shipments, the government seeks to secure better pricing for its oil amid regional logistical constraints.

"The task was assigned to the company 'for the first time in decades'," said Ali Qais, Director General of IOTC, adding that the move allows the state oil marketer to access "better sales and pricing opportunities."

Impact of Regional Conflict on Export Flows

Maritime traffic through the Strait of Hormuz has decreased due to geopolitical instability. According to a report from The National, total flows through the strait fell to 6.02 million barrels per day in September. This is a decline from the 20.64 million barrels per day recorded in February before the conflict intensified.

Strategic Expansion of the Iraqi Fleet

IOTC is negotiating the acquisition of a fleet of specialized crude tankers to sustain this export model. By expanding its capacity, the company intends to reduce its reliance on third-party shippers and compete with other regional energy exporters.

This initiative marks a change from Iraq's reliance on international shipping intermediaries. By controlling the logistics of its crude through the waterway, the Iraqi government is attempting to protect its primary source of national revenue from supply chain bottlenecks in the Persian Gulf.