Baghdad accelerates efforts to revive crude exports

The Iraqi government is intensifying negotiations with international energy companies to restart shuttered oilfields as Baghdad urgently seeks to circumvent the ongoing closure of the Strait of Hormuz.

Last week, Prime Minister Ali al-Zaidi convened senior Ministry of Oil officials to formulate contingency plans following the suspension of traditional maritime routes. A central pillar of this strategy involves diversifying export corridors to shield sovereign revenues from regional instability.

Saheb Bazoun, the oil ministry spokesperson, confirmed that discussions are underway with the foreign operators that recently withdrew from the country. He noted that while several producing assets were idled, critical reservoir integrity and operational infrastructure remain intact. Furthermore, preparations are rapidly advancing to resume crude shipments via the Turkish port of Ceyhan in the coming days.

“We have contacted tankers and major companies to contract for oil exports, and the door is open to all companies,” Bazoun previously said, adding that accelerating the export process would “foster stability and generate revenue for the state” alongside improving domestic fuel supplies.

The growing urgency to secure reliable alternatives has already yielded new logistical pathways. State oil marketer SOMO recently commenced loading Iraqi black oil at the Syrian port of Baniyas for onward shipment to European refiners. Ali Nizar al-Shatari, SOMO’s general manager, described the Mediterranean route as “very important to open a new marketing path that can be invested in the future, as well as being invested now in this crisis.” He stressed that SOMO personnel are working to maximise exports “despite all the logistical, technical and security obstacles”.

Simultaneously, Baghdad is managing a broader upstream transition. Authorities are finalising a settlement following Lukoil’s withdrawal from the West Qurna-2 field. The Russian group has signed a preliminary agreement with US investment firm Carlyle to sell most overseas assets, while framework agreements could allow Chevron to assume field operations.

Domestically, the government is advancing gas monetisation to support the national grid amid the wider geopolitical strain. Ezzat Saber, deputy oil minister for gas affairs, confirmed the Bin Umar project will shortly produce around 80mn cubic feet of dry gas daily for power generation. Saber noted the development, accelerated through strategic cooperation with the state-owned South Gas Company, would reduce flaring and support the grid, marking a critical step in Iraq's bid to stabilise its internal energy balance while restructuring its international export architecture.