Iraq approves 3-month mechanism to diversify crude export routes

20/08/2026 02:43 AST

Iraq's cabinet has approved a three-month mechanism for exporting crude through specialized local and international companies and multiple export outlets, as Baghdad seeks to diversify its oil export routes amid disruptions.

The decision was taken during the 15th regular session of the Council of Ministers, chaired by Prime Minister Ali Falih Al-Zaidi, according to a statement posted on the Iraqi Prime Minister's official X account. The contracts will take effect from Sept. 1, and run for three months, according to the statement.

The decision comes as Iraq works to reduce its reliance on Gulf shipping lanes after disruptions to traffic through the Strait of Hormuz since the outbreak of the Iran-US conflict. Most of Iraq's crude exports are shipped from terminals in the southern Gulf, leaving the country particularly exposed to disruptions in the waterway.

In the statement, the cabinet said: "The Council voted in favor of the mechanisms for exporting Iraqi oil through specialized global and local companies, and via various outlets, with contracts to be for a period of (3 months), effective starting from the date of Sept. 1."

Export routes
Earlier in August, Iraq and Turkiye signed a deal to increase oil exports through a pipeline to the Turkish Mediterranean port of Ceyhan, as Baghdad seeks alternative routes for its crude.

The cabinet also authorized the oil minister to establish additional transport routes for existing contracts and renew them, as well as approve oil product imports when needed to ensure stable supplies and prevent shortages.

Iraq's Oil Pipeline Co. was instructed to expand loading platforms, while the cabinet approved work to rehabilitate the IT2A station and a supporting unloading station for IT1, with a capacity of 300,000 barrels per day.

Higher exports
Iraq's average daily oil exports since the beginning of August have recovered to their highest level since the war disrupted traffic through the Strait of Hormuz, the oil ministry said last week.

Oil Minister Bassem Mohammed Khudair said exports had averaged about 2 million bpd since the start of August, totaling around 26 million barrels through the first two weeks of the month.

Iraq is OPEC's second-largest oil producer and relies heavily on crude exports for government revenues. In July, Baghdad signed a deal with US oil services giant Halliburton to manage two southern oil fields as it seeks to boost production.

Arab News