Iraq’s crude oil exports surged to 2.34 million barrels per day in August, up from 1.35 million bpd in July as steep discounts on Basrah crude and improved tanker movements through the Strait of Hormuz helped restore shipments disrupted by regional tensions.
Exports jumped from approximately 1.35 million barrels per day in July, representing an increase of about 73 percent in one month, according to Iraqi energy officials.
The rebound provides additional crude supplies to the global market at a time when renewed tensions around the Strait of Hormuz continue to create uncertainty over Middle Eastern oil flows.
Iraq, the second-largest producer in the Organization of the Petroleum Exporting Countries, is particularly exposed to disruption in the strategic waterway because much of its crude is shipped from southern export terminals through the Persian Gulf.
The country’s exports had fallen sharply following the near-closure of Hormuz after the Iran conflict erupted on February 28.
Despite the August recovery, shipments remain well below levels recorded before the conflict.
Preliminary estimates from Vortexa put Iraqi crude exports at about 2.3 million barrels per day in August, while Kpler estimated approximately 2.17 million barrels per day.
Both estimates represent a significant improvement from July but remain below February levels, when the two shipping-data providers estimated exports at approximately 3.7 million and 3.36 million barrels per day, respectively.
A combination of aggressive pricing and improved tanker access has helped Iraq restore some of the lost volumes.
Iraq’s state oil marketer, SOMO, offered August-loading Basrah crude at discounts of between $25 and $30 per barrel on a free-on-board basis, creating substantial incentives for traders and refiners willing to manage the additional shipping and security risks associated with the region.
The discounts attracted major international buyers and trading houses, including PetroChina, Zhenhua Oil, TotalEnergies, Vitol, Trafigura and Mercuria.
Iran has also granted permission for a number of tankers carrying Iraqi crude to transit the Strait of Hormuz, improving Baghdad’s ability to move oil from its southern terminals.
It remains unclear whether the approval covers every Iraqi cargo.
The development nevertheless gives Iraq an important advantage at a time when shipping through the waterway remains severely disrupted.
Demand from China and India, two of the world’s largest crude importers, has responded strongly to the availability of discounted Iraqi barrels.
India’s Reliance Industries received about 4 million barrels of Basrah crude in August, while Bharat Petroleum is expected to receive its first Iraqi cargo of the current fiscal year.
Chinese refiners have also secured at least 16 million barrels of Basrah crude scheduled for September arrival, indicating that Iraq’s export recovery could extend into the new month.
PetroChina alone loaded about 6 million barrels from Iraq’s Basrah terminal across July and August.
The recovery could provide some relief to a global oil market that remains highly sensitive to developments around Hormuz.
However, the risk of another sharp disruption remains elevated.
Renewed military exchanges involving the United States and Iran have increased concerns about the security of vessels operating around the waterway, keeping a geopolitical risk premium embedded in crude prices.
Brent crude traded around $95 per barrel on Thursday, while US West Texas Intermediate remained above $90 per barrel as investors assessed the likelihood of further supply interruptions.
The Strait of Hormuz remains one of the world’s most strategically important energy corridors, meaning any sustained disruption can rapidly affect crude prices, tanker rates, insurance costs and refinery supply chains across Asia and other major consuming regions.
Iraq is therefore working to reduce its dependence on the route.
The country’s Oil Ministry has been developing alternative export channels through northern and western Iraq, including efforts to increase shipments through Turkey’s Ceyhan port and explore additional access to the Mediterranean through Syria.
Oil flows to Ceyhan have recently been running at between 150,000 and 180,000 barrels per day.
For Iraq, restoring exports is particularly important because crude sales remain the country’s dominant source of government revenue.
For the broader market, however, the August increase offers only partial relief.
Iraq is still exporting substantially less crude than before the conflict, while the sustainability of the latest recovery depends heavily on whether tankers can continue moving safely through Hormuz.
September will therefore provide an important test.
Further increases in Iraqi shipments could add more heavy crude to the international market and ease some supply pressure, particularly for refiners in China and India.
But another escalation around the Strait of Hormuz could quickly reverse those gains and once again tighten Middle Eastern crude supplies.