Iran grants Iraq limited Hormuz passage to revive oil exports

Iran has granted limited permits to Iraqi oil tankers seeking passage through the Strait of Hormuz, according to Iran’s state-run IRNA. This move comes after repeated requests from the Iraqi government for permission to pass through the key crude oil shipping lane. The exception was made following a visit by a senior Iranian official to Baghdad, where Iraq’s parliament speaker Haibat Al-Halbousi met with Iran’s parliament speaker Mohammad Bagher Ghalibaf and asked for a "special status" for Iraqi oil exports through the Strait of Hormuz.

Iraq has been severely impacted by disruptions to its oil exports, with a significant portion of its oil passing through the Strait of Hormuz before the war broke out. The country exported around 3.4 million barrels of crude per day to this route. Oil sales make up about 90% of Iraq’s federal budget revenue. Since the passage was blocked, Iraq’s oil revenue plummeted from $6.8 billion in February to approximately $2.3 billion in May and June.

The Strait of Hormuz is a vital global energy corridor, linking the Persian Gulf and the Gulf of Oman, and was once responsible for transporting one-fifth of the world’s crude oil and liquefied natural gas (LNG) shipments. Despite Iran’s initial promise not to restrict transiting of Iraqi vessels, the restrictions were tightened again following the collapse of a cease-fire agreement between the United States and Iran.