Despite Iran confirming Iraqi shipments are exempt from disruptions in the Strait of Hormuz, Iraq still faces major obstacles. The nation lacks large tankers and relies on foreign vessels. High insurance costs and regional tensions continue to delay operations.
On Saturday, Ibrahim Zolfaqari, spokesman for Iran's Khatam al-Anbiya Central Headquarters, said Iraq would be fully exempt from any restrictions and fees on oil transit through the waterway. The statement raised expectations that exports from Iraq's southern terminals could soon return to normal levels.
However, industry experts note that structural constraints continue to hinder a rapid recovery.
"The statement by Iran is new, and there are no further details as to how allowing Iraqi vessels may work, but the statement in itself is encouraging," Shwan Zulal, managing partner at Carduchi Consulting , told The New Arab . "Iraq does not have its own fleet, but willing vessels may take the risk and lift oil from the southern ports. It is encouraging to see one tanker making that trip over the weekend, and more may follow." Iraq relies on foreign-owned tankers arranged by buyers to export crude, as it lacks vessels capable of large-scale oil transport. This reliance has become a bottleneck amid regional tensions.
"Despite reports suggesting Iraqi oil tankers may be permitted to transit the Strait of Hormuz, a key question remains: why has Iraq not resumed oil exports from its southern terminals?" Asim Jihad, an Iraqi energy expert, writer, and former spokesperson for Iraq's oil ministry, told TNA .
"In response, Iraq does not rely on owning supertankers to export crude. Instead, the State Organisation for Marketing of Oil (SOMO) uses a 'free on board' system, requiring buyers to provide tankers and ship oil from Iraqi ports."
Jihad said risk aversion among global shipping firms is the main problem. "SOMO has not failed to secure tanker contracts; instead, shipping companies and tanker owners now see the region as too high-risk."
Insurance costs have surged, complicating exports. "The sharp rise in maritime insurance premiums is a major factor. Insurers impose high costs in conflict zones, causing many companies to hesitate or withdraw," he said.
He stressed that political assurances alone cannot restore exports. "Transit permissions do not guarantee a safe, secure shipping environment. Shipping and insurance companies make decisions based on real risk, not just political statements."
Jihad said resuming exports depends on improving market confidence. "Export resumption relies on restoring maritime confidence, reducing risk, and lowering insurance—not just on announcements allowing passage."
He urged immediate action from Iraqi authorities. "SOMO must urgently negotiate—either directly or via intermediaries—to lease tankers at above-market rates with guarantees. This could prompt more shipping firms to send vessels and restart loading and export operations."
Jihad noted Iraq’s tanker capacity is limited. "The Iraqi Oil Tankers Company lacks supertankers for crude cargoes up to two million barrels. Its small fleet mainly transports fuel oil, with a capacity of around 33,000 tonnes."
Showing readiness to resume flows, SOMO has asked clients to submit oil lifting schedules within 24 hours, according to a Reuters review of a document.
"Please submit your lifting schedules within 24 hours to enable the timely processing of your programmes, including vessel nominations and contractual volumes," SOMO said on 5 April.
The company added that export infrastructure remains operational. "All loading terminals, including Basrah Oil Terminal, remain fully operational. SOMO is fully ready to execute all contractual lifts without limitation." Iraq's oil exports dropped by about 80% in early April 2026, from over 3.4 million barrels per day (bpd) to about 800,000–1,000,000 bpd, after the Strait of Hormuz closed amid regional conflict.
Southern exports have nearly halted completely, with only 250,000–300,000 bpd moving via northern routes through Turkey's Ceyhan port. Baghdad has tried limited alternatives, like trucking oil to Jordan and Syria, but volumes remain small.
Overall, oil production has dropped by over 3.6 million bpd, leaving about 800,000–900,000 bpd for domestic use. Exports remain restricted despite reports of exemptions.
Analysts warn that without enough tankers and lower risk premiums, Iraq's return to full export capacity is uncertain.