Iraq says has ‘understandings’ to bypass Hormuz blockade

Baghdad has announced a significant diplomatic development, revealing 'understandings' with both the United States and Iran to navigate the challenges posed by the blockade of the Strait of Hormuz. This move is crucial for Iraq, a founding member of OPEC, as the strait is the primary conduit for the majority of its crude oil exports.

The Iraqi oil ministry spokesperson, Saheb Bazoun, stated that these agreements are designed to circumvent the blockade and guarantee exports. While details remain scarce, the announcement suggests a concerted effort to ensure that the vital energy supply route, through which approximately one-fifth of global oil and gas passes, does not cripple Iraq's economy.

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there are understandings with the American and Iranian sides to circumvent the blockade imposed on the Strait of Hormuz, and with all parties to guarantee exports

Iraq's economy is heavily reliant on oil revenues, which account for about 90 percent of its budget. The disruptions in the Strait of Hormuz have already had a severe impact, leading to a significant drop in export revenues. Therefore, securing these understandings is paramount for economic stability.

In addition to these diplomatic efforts, Iraq is actively pursuing alternative export routes. These include the established pipeline to the Turkish port of Ceyhan and, more recently, the use of tanker trucks through Syria. These measures demonstrate Iraq's resilience and its determination to maintain its position in the global energy market despite the geopolitical complexities surrounding the Strait of Hormuz.

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Oil exports account for some 90 percent of Iraq’s budget revenues, which plummeted more than 70 percent in March compared with February.