Iran Lets Iraqi Oil Tankers Through Hormuz as Export Risks Mount

A selective opening after Baghdad's appeals

Iran has authorized an unspecified number of Iraqi oil tankers to cross the Strait of Hormuz after repeated requests from Baghdad, Iranian state media said Saturday. The announcement marks a limited concession rather than a general reopening: Tehran still says ships need permission and must pay transit fees to use the strategic waterway.reuters +1

One appeal was made during Iranian parliamentary speaker Mohammad Bagher Ghalibaf's visit to Iraq, where tanker access was among Baghdad's principal requests.thenationalnews Iraqi officials are seeking more permits, while talks between Iran and Oman over a new route through the strait have yet to produce an agreement.wionews

Relief for Iraq, not a return to normal

The decision matters because Iraq has few practical alternatives for moving most of its crude to overseas buyers. Iran's state news agency described six months of Iraqi requests and said the new approvals were granted despite continuing military insecurity in the waterway.wionews The number of vessels covered, their cargo volumes and transit schedule were not disclosed.reuters

Passage has remained volatile even during temporary thaws. In June, ship-tracking data showed five vessels crossing on one Sunday, down from 26 the day before, after Iran again declared the strait closed; three very large crude carriers carrying cargoes from the UAE, Kuwait and Iraq had exited a day earlier.reuters Saturday's permission therefore offers Baghdad a route for some barrels without resolving the larger uncertainty facing commercial shipping.

The oil market's shrinking cushion

Hormuz connects the Gulf with the Arabian Sea and narrows to roughly 33 kilometres. About one-fifth of global oil and gas flows through the corridor, making disruptions consequential well beyond the region.bbc Before the war, the route handled energy exports from Iraq, Kuwait, Qatar, Saudi Arabia, the UAE and Iran, with Asian economies especially exposed.bbc

The latest International Energy Agency assessment underscores the pressure. Gulf production recovered to 23.9 million barrels per day in July but remained 8.3 million barrels per day below pre-war levels, while regional exports fell to an average 15 million barrels per day.gcaptain Global observed inventories dropped by 69 million barrels in July, and the agency projected a third-quarter supply deficit of 1.8 million barrels per day.gcaptain

The concession arrives as Washington prepares another package of economic sanctions and U.S.-Iran rhetoric hardens.haaretz For oil buyers, the practical test is whether approved Iraqi tankers cross safely and whether Tehran expands the list. Until regular traffic resumes, a handful of permissions may ease Iraq's immediate export bottleneck but will do little to remove the risk premium hanging over energy markets.