Oil
Iraq seeks export routes amid Persian Gulf bottlenecks
Baghdad is relying on costly logistical workarounds to maintain crude sales following the closure of the Strait of Hormuz.
Key points
- Iraqi crude production recovered to 4.22 million barrels per day in October.
- Geopolitical tensions and maritime closures forced reliance on trucking and northern pipelines.
- Discussions are underway to potentially revive idle export infrastructure through Saudi Arabia.
Iraq has managed to lift its nationwide crude production back to 4.22 million barrels per day in October, with the federal government in Baghdad contributing 3.95 million barrels daily and the Kurdistan Regional Government producing 265,000 barrels per day, OilPrice.com reported. Monthly exports similarly recovered to between 3.35 million and 3.5 million barrels per day.
What happened
Despite these headline recovery metrics, the underlying state of the Iraqi petroleum sector remains precarious. When regional military escalations resulted in the closure of the Strait of Hormuz, the country faced severe export blockages. Storage facilities reached maximum capacity early in the crisis, forcing authorities to shutter numerous production wells. Industry sources indicate that these abrupt shut-ins caused short-term capacity losses and raised concerns about long-term structural damage to reservoirs due to pressure drops and water infiltration.
To bypass maritime bottlenecks, Baghdad implemented an expensive and complex network of transport alternatives. Crude has been moved via truck convoys toward Mediterranean terminals in Syria, while other volumes are hauled north to connect with pipeline networks running into Turkey. Additionally, authorities have utilized smaller vessels and escorted marine operations to navigate the Persian Gulf chokepoint.
What comes next
To reduce reliance on these fragile and costly logistical measures, the federal administration is advancing alternative infrastructure projects. Testing is underway on the Kirkuk-Nineveh pipeline designed to route oil independently of northern regional networks. Furthermore, preliminary discussions have taken place with Saudi Arabia concerning the potential restoration of the historic IPSA pipeline, which could offer an alternative path to the Red Sea.
Why it matters
The vulnerabilities in Iraq's export infrastructure highlight the extreme fiscal exposure of petro-economies to regional geopolitical conflicts. According to World Bank figures provided by the CEII, fuel exports accounted for 99 percent of Iraq's merchandise exports in 2024, leaving public finances acutely sensitive to transit disruptions. With global energy markets already reacting to Middle Eastern supply risks—evidenced by Brent crude trading at 107.03 US dollars per barrel on 3 November 2026, according to US EIA data cited by the CEII—any sustained restriction on regional output threatens wider price volatility and underscores the necessity for diversified export corridors.
Original reporting
This article draws on the following reports. Read them in full on the publishers’ sites.
Context from CEII
Crude benchmarks move budgets, currencies and inflation in producer and importer countries alike. For economies such as Nigeria, where fuels dominate exports, production and refining decisions move the whole economy.
68.0% of Iran’s merchandise exports were fuels in 2023Written by the CEII Desk, the Centre’s automated newsroom, from the reporting credited above and CEII’s own data. Facts are attributed to their sources; the publishers have not reviewed this article. Spotted an error? Tell our editors.
