Iran allowed a number of Iraqi oil tankers to cross the Strait of Hormuz, after repeated requests made by Baghdad through various channels, in a move that comes days after the visit of the Speaker of the Iranian Shura Council, Muhammad Baqir Qalibaf, to Iraq, during which securing a corridor for Iraqi oil exports was one of the most prominent issues raised.
The official Iranian news agency, IRNA, said on Saturday that Tehran had granted “special permission” to a number of Iraqi tankers to pass through the strait, noting that obtaining this approval was one of the main demands put forward by Baghdad during Qalibaf’s three-day visit.
Iraqi President Nizar Amidi confirmed that Iran has facilitated in recent days the passage of ships carrying Iraqi oil through the Strait of Hormuz. He said during the “Baghdad Dialogue” conference that Iraqi officials discussed with the Iranian side the issue of continuing the export of Iraqi oil through the strategic sea corridor.
However, he pointed out that the issue is still “complex,” in light of the continuing security unrest and the decline of navigation traffic in the strait to levels much lower than it was before the outbreak of war.
Iraq is one of the countries most affected by the closure of the Strait of Hormuz, according to Reuters, in light of its oil exports being largely dependent on the sea lane through which, before the outbreak of war, about a fifth of the world’s oil and liquefied natural gas supplies crossed. Iraq was producing about four million barrels of oil per day before the outbreak of war.
In the face of these pressures, Baghdad began accelerating its plans to diversify oil export outlets and reduce its exposure to any disruption in Hormuz. Prime Minister Ali Al-Zaidi said on Friday that Iraq is working to increase exports through the Turkish port of Ceyhan, in addition to plans to open routes through the Syrian port of Baniyas and the Jordanian port of Aqaba. Reuters indicates that the Iraqi-Turkish pipeline to Ceyhan, which is the only operating export line to Iraq currently, transports only about 170,000 barrels per day.
Other alternatives still need years before they can compensate for the dependence on Hormuz. Reuters quoted sources that the pipeline project to the Syrian port of Baniyas may require about four years, at a cost of no less than $15 billion, which explains the importance of obtaining, in the near term, guarantees for the passage of Iraqi oil through the strait.
The Iranian decision came after a three-day visit by the Speaker of the Iranian Shura Council, Mohammad Bagher Qalibaf, to Iraq, which began on August 19. During which he met with senior Iraqi officials, while economic, security and regional files topped the agenda of the talks.
According to Iranian media, Qalibaf described the atmosphere of his talks with Iraqi officials as characterized by “intimacy, warmth, and brotherhood,” and said that the discussions addressed political, security, and economic issues, including border security and the implementation of agreements concluded between the two countries.
But the economic dimension of the visit was particularly evident in Qalibaf's meeting with Iraqi and Iranian businessmen in Baghdad. Reuters quoted him as calling for strengthening economic relations between the two countries and using the two national currencies in bilateral trade to reduce dependence on the US dollar. He said that economic development and security are interconnected, calling for plans to confront US sanctions.
Allowing Iraqi tankers to cross comes at a time when Tehran is still using its ability to disrupt navigation in the Strait of Hormuz as a major pressure card in its confrontation with the United States. Reuters says that oil shipments through the Strait have virtually stopped to a large extent, with Iran threatening to strike any oil tanker that crosses without its permission.
In contrast, the United States imposed a virtual blockade on Iranian ships in ports, while the crisis in Hormuz left hundreds of ships and thousands of sailors stranded, at a time when transit traffic declined to a small fraction of its pre-war levels. Despite the American strikes that caused significant damage to the Iranian naval and air forces, Reuters says that Tehran still maintains sufficient missile and drone capabilities to threaten the movement of tankers in the region.
