Iraq Approves New Oil Export Plan to Bypass Hormuz

The Council of Ministers of Iraq approved a three-month mechanism starting September 1, 2026, to export crude oil through specialized local and international companies via multiple outlets. The decision aims to diversify export channels and reduce dependence on southern Gulf terminals and the Strait of Hormuz, which have faced disruptions due to the conflict between Iran and the United States.

Under the new plan, crude oil will be purchased at a 30% discount based on the lower of the federal budget price or the price set by the State Organization for Marketing of Oil, with payments directed to the Public Treasury. To support this shift, the cabinet authorized the oil minister to establish new transport routes and approve petroleum product imports to ensure supply stability. The Iraq Oil Pipeline Company was further instructed to rehabilitate unloading stations and expand loading platforms.

Iraq is also pursuing alternative routes through Syria and Turkey, having signed a deal with the Turkish government to increase exports via the pipeline to the port of Ceyhan. Oil Minister Bassem Mohammed Khudair reported that average daily exports had already recovered to approximately 2 million barrels per day in early August. The government has not yet disclosed the specific companies involved or the exact volumes of oil covered by the new contracts.