Iraq Resumes Oil Exports Through Strait of Hormuz Under Special Iranian Exemption

Iraq has instructed its Asian buyers to collect crude oil cargoes after securing a special exemption from Iran, allowing Iraqi tankers to transit the Strait of Hormuz for the first time since the waterway's effective closure amid escalating regional conflict. According to Bloomberg reports, the Suezmax tanker Ocean Thunder, loaded with about 1 million barrels from Iraq's Basrah terminal, successfully exited the Persian Gulf via a northerly Iranian route on Sunday morning, passing through Iran's designated "toll booth" between Qeshm and Larak islands.^[1][4] This marks a critical test of Iran's selective transit policy, which has blocked most shipping since late February 2026 while permitting passage for "brotherly" neighbors and select Asian destinations.^[2][3]

The exemption came a day after Iran publicly stated that Iraq, as a fellow neighbor, would be allowed to use the strait, differentiating it from restrictions on vessels linked to the US, Israel, and Western allies. Vessel-tracking data compiled by Bloomberg confirmed the Ocean Thunder's journey toward Malaysia, signaling to refiners that Iraqi crude—previously stranded—can now reach key markets in Asia.^[2][4] Iraq's move directly addresses buyer hesitancy, as traders had paused loadings amid fears of Iranian interdiction in the strait, through which a fifth of global oil and LNG normally flows.^[1][2]

This development unfolds against the backdrop of the 2026 Strait of Hormuz crisis, triggered by US and Israeli strikes on Iran, including the killing of Supreme Leader Ali Khamenei, followed by Iranian missile attacks and IRGC warnings that halted commercial traffic starting February 28. Iran has since imposed a permission-based system, funneling large vessels through narrow northern corridors in its waters, with 16 ships crossing since Saturday—11 outbound, including bulk carriers from Iranian ports and products tankers from Saudi Arabia.^[1][6] Qatar LNG tankers are now attempting their first exit since the war began, while Indian LPG carriers and even "zombie tankers" have slipped through, underscoring Iran's strategy of selective control rather than total blockade.^[1][3]

Buyers in Asia, particularly refiners in India, Malaysia, and China, stand to benefit most, as these nations have secured bilateral deals for energy shipments, agricultural cargo, and LPG. The Ocean Thunder joins prior successes like the Omega Trader, a very large crude carrier delivering 2 million barrels of Iraqi oil to India, operated by Japan's Mitsui OSK.^[3] However, traffic remains severely constrained, with tracking firm Windward noting only permission-granted passages, raising questions about long-term reliability.^[3]

For Iraq, a major oil exporter, this exemption is vital: its crude was among the first to test the route, potentially unlocking billions in stranded exports loaded in early March. Global markets watch closely, as restored Iraqi flows could ease upward pressure on oil prices strained by the chokepoint's disruption, though broader shipping—including from Saudi Arabia and the UAE—faces ongoing hurdles.^[2][5] Greek-managed tankers have also navigated covertly with transponders off, but Iraq's overt passage highlights shifting alliances.^[5]

Looking ahead, the transit's success may encourage more Iraqi loadings, but buyers' confidence hinges on consistent enforcement of the exemption amid Iran's tolling and routing mandates. As one tanker reaches Malaysia, attention turns to whether Qatar's LNG and other exempted cargoes follow suit, potentially signaling a partial thaw in the crisis that has upended energy trade routes and bypass options like Oman's ports, hit by drones earlier.^[1][6] Stakeholders from producers to consumers brace for volatility, with Iran's "pressure point" leverage showing no signs of easing.^[6]