Iraq says US understandings allow Hormuz exports via Oman lane

Iraq's foreign minister said Iraq has reached "understandings" with the United States that would let Iraqi oil exports pass through the Strait of Hormuz by a shipping lane near Oman. Fuad Hussein made the remark in an interview with Al Jazeera, Reuters reported on 8 November¹.

The Reuters account gave no terms. It did not say which cargoes would qualify, who would control the lane, or when it would open. No statement from a US official backing the arrangement was published with the report¹.

Hussein said Iraq's losses from the war and the disruption to its oil exports had reached $60 billion¹. Exports recovered to about 3.5 million barrels a day in October, from 2.65 million barrels a day in September, according to Iraqi energy officials cited by Reuters¹.

A lane with no published rules

The lane described by Hussein has not been matched to any published document. A mediation plan led by Qatar sets out a different sequence. Under that proposal, the United States would lift its naval blockade. Iran would open the strait on the second day, using a route it has already negotiated with Oman. The two countries would lodge the route jointly with the International Maritime Organization⁴.

It is not clear from the two accounts whether Hussein's lane is the same one. Iranian officials have described existing exemptions. Amir Hayat Moqaddam is deputy chair of the Iranian parliament's national security and foreign policy committee. He told the Iranian Students' News Agency that ships from China, India, Qatar and Iraq were allowed to pass. He said Iran charged Indian and Chinese vessels transit fees, while Qatari ships went free⁴. That indicates Iraqi ships were already being allowed through under Iranian arrangements, a point Hussein's remarks did not cover^4, 1.

Why Basrah cargoes are exposed

Iraq's export terminals sit west of Hormuz, inside the Gulf. Cargoes therefore either transit the strait or are shuttled to ship-to-ship transfer points off the UAE and Oman³. Gulf national oil companies have assembled a fleet of nearly 230 tankers for that work, about 80% of them VLCCs, the largest crude carriers. Many sail with their tracking signals off³.

Windward, citing Vortexa, put October crude exports from terminals west of Hormuz at about 11 million barrels a day. That compares with 1.56 million barrels a day in May and 14.5 million barrels a day before the war³. The arrangement ties up an estimated 15% to 20% of the global VLCC fleet at any time³. Clarksons said shuttle volumes through the strait averaged an estimated 10.5 million barrels a day in October².

Capacity is still tight. Hindustan Petroleum's chairman, Vikas Kaushal, said finding ships for available loading dates is difficult. He said some owners withdrew after agreeing to carry cargoes⁵. The refiner's Middle East crude purchases averaged 256,000 barrels a day in October, up from 57,000 barrels a day in April, Kpler data in the report showed⁵.

S&P Global Commodities at Sea counted 17 ship transits through Hormuz on 24 and 25 October⁶. US Central Command said more than 3,000 commercial ships had passed with its support in six months. It said at least 1.5 billion barrels of crude had been exported through the strait since the summer⁶.

Freight is the cost line that moves first. Randy Hawkins is Valero's vice president of crude and feedstocks supply and trading. He said freight from the US Gulf Coast to Asia had jumped to $30 to $35 a barrel, from about $5 a year earlier⁷.

What a statement does not change

Iraqi crude is one stream in a strait that carried 10.23 million barrels a day of Gulf crude in October. Kpler's Muyu Xu said about 42% went to China and 13% to India⁴. Attacks continue. Iran and the United States traded strikes on commercial vessels in and around Hormuz over the weekend⁸. Iran's Revolutionary Guards said two tankers using an unauthorised route hit mines and caught fire⁴.

US blockade enforcement is a separate track. Traders including Trafigura, Vitol, Mercuria and ADNOC are seeking US licences to use sanctioned tankers. The talks cover about 50 of roughly 1,600 sanctioned ships, with the Treasury reviewing applications case by case⁹.

What to watch

Any confirmation from the US State Department, Treasury or Central Command, or a notice from Iraq's oil ministry or SOMO, the state oil marketer. Whether a lane is registered with the International Maritime Organization, as the Qatar proposal envisages⁴. And whether access covers only Iraqi state cargoes or any buyer's chartered ship¹.