Iraq is moving to get more of its own shipping under control. According to people familiar with the plans, the state-run Iraqi Oil Tankers Co. is aiming to charter at least one VLCC plus a Suezmax imminently, and no fewer than two vessels are slated to arrive within the next few days. The oil ministry and IOTC did not comment when asked about the plans.
IOTC intends to relaunch a tender for additional ships after a previous attempt to line up two or more was canceled because the bids did not meet the bar. Separately, companies in Iraq have already purchased at least two supertankers, including one bought last month for about $200 million. Based on Clarkson Research Services Ltd data, that price would be a record for that type of vessel.
Months of war risk have turned the Strait of Hormuz into a gauntlet, disrupting flows and reshaping how Gulf crude gets to buyers. Iraq has felt the pinch more than most because it does not own tankers, which has meant offering sizable discounts to persuade customers to send ships far inside the Gulf to load.
Over the weekend, IOTC Director General Ali Qais Abdul Jabbar said in a video statement that the company loaded a VLCC to pass through Hormuz "for the first time in decades." And on Saturday, Oil Minister Basim Mohammed Khudair said authorities are taking steps to obtain financing to buy tankers for IOTC, without detailing how many or at what cost. He said owning ships would support exports and lift financial returns.
Securing tankers early is what shipping looks like when risk is rising. Market Briefs tracks energy logistics free every morning.
More Gulf barrels coming back to market are colliding with a limited number of ships willing and able to run the Hormuz route. An official said last month that Kuwait is also looking to buy ships. The United Arab Emirates has already spent billions on ships, while Saudi Arabia's sizable fleet gives it a flexibility edge.
That tightness has supercharged earnings. Industry executives say today's levels would have been hard to imagine before the conflict. On the benchmark run from Saudi Arabia to China, daily returns are $1.29 million, compared with an average below $30,000 a day over 2021 through 2025, per Baltic Exchange data. For Iraq, the near-term plan is to use leased ships through year-end to shuttle crude across Hormuz and then transfer it to other tankers outside the chokepoint, a playbook many Gulf exporters are using.
If Iraq can secure more lift, it cuts reliance on buyers to take on the risk and could steady its export rhythm. But with ship supply tight and earnings sky-high, transport costs remain a swing factor for crude differentials and for any investment tied to tanker rates or Middle East flows. Watch the tender results and whether Baghdad secures funding for its own fleet - both will shape how much Iraq pays to move every barrel.
Freight costs around a chokepoint eventually land in the oil price. Get the free Market Briefs daily newsletter and follow the route.
