Pessimism Grows over Iraq’s Prospects for Resuming Oil Exports

An Iraqi petroleum products tanker (Iraqi News Agency) 
An Iraqi petroleum products tanker (Iraqi News Agency) 
TT

Pessimism Grows over Iraq’s Prospects for Resuming Oil Exports

An Iraqi petroleum products tanker (Iraqi News Agency) 
An Iraqi petroleum products tanker (Iraqi News Agency) 

A growing number of Iraqi oil and economic experts are voicing pessimism about the country’s ability to resume crude exports via the Gulf and the Strait of Hormuz, despite Iran’s announcement of an “exception” allowing Iraqi shipments to pass as those of a “friendly country”.

Iraq has suffered a sharp blow to its oil sector following the US-Israeli conflict with Iran and the closure of the Strait of Hormuz, losing roughly three-quarters of its exports. The country had been producing about 3.5 million barrels per day, but current export volumes have dropped to around one million barrels per day, most of which is diverted to domestic consumption.

More than 300,000 barrels per day are still exported via the Kurdistan Region through Türkiye’s Ceyhan port, while smaller quantities are transported overland by tanker trucks to Jordan and Syria.

As a result of the collapse in exports, Iraq is expected to face a monthly fiscal deficit of between $5 billion and $6 billion, placing the government under severe financial strain, economists say.

While Iran’s decision has been welcomed by its allies and sympathizers as a positive step for Iraq, sceptics argue that resuming exports is far more complex than a political declaration. They point to complex web of technical, security and logistical challenges involving maritime risk, insurance costs, shipping company behavior and contractual arrangements.

Security concerns remain acute. Despite the Iranian exemption, four oil facilities in the southern province of Basra were targeted by drone attacks over the past two days, reportedly carried out by Iran-backed armed factions seeking to pressure foreign companies to leave Iraq. The incidents raise questions about the consistency between Tehran’s declared position and the actions of allied groups on the ground.

Former oil ministry spokesman Assem Jihad said Iraq’s export capacity is governed by “fundamental realities” that make a swift return to normal operations unlikely.

In comments posted on Facebook, he noted that Iraq does not rely on its own fleet of supertankers to export crude. Instead, the State Organization for Marketing of Oil (SOMO) sells oil under contracts whereby buyers arrange shipping and lift cargoes from Iraqi ports.

The key issue, he explained, is not a lack of contracts but the reluctance of global shipping companies and tanker owners to enter what is now considered a high-risk zone. Even if buyers are willing, securing vessels prepared to dock at southern Iraqi ports or operate near conflict areas remains a major obstacle.

Insurance costs have also surged. Companies face steep premiums for vessels transiting conflict zones, discouraging participation. “Even with statements allowing passage, that does not necessarily translate into a safe and secure shipping environment,” Jihad said, adding that insurers and shipping firms base decisions on actual risk assessments rather than political assurances.

He argued that exports would only resume once confidence returns to maritime markets, risks decline and insurance costs fall.

Economic researcher Ziad al-Hashimi outlined additional barriers preventing Iraq from benefiting from the Iranian decision.

Writing on X, he said Iraq’s oil production, service companies and southern export terminals are currently operating under “force majeure”, a status declared on March 20 across fields run by foreign firms. Lifting this clause could take time, as companies would require assurances that operations will not be targeted again.

“Its removal is not a quick process,” he noted, warning of “real risk” if exports resume without improved security guarantees.

Al-Hashimi also pointed to ongoing attacks on oil fields, saying that many service companies have evacuated staff and suspended operations. “Work will not return to normal as long as the war continues,” he underlined.

He further questioned the practicality of Iran’s exemption, which applies to loaded Iraqi tankers exiting Hormuz. “How will empty vessels enter the strait to reach Iraq, and who will guarantee their safety?” he asked.

The government and oil ministry have meanwhile faced criticism for failing to take precautionary measures to safeguard production, Iraq’s main source of national income. Critics say Baghdad should have diversified export routes or maintained floating storage capacity, as many oil-producing countries do.

According to Basra-based economist Nabil al-Marsoumi, Iraq’s state tanker company, established in 1972, currently owns just six vessels for refined products with a combined capacity of 117,000 tons. Four of these ships are over 15 years old, requiring more frequent maintenance.

The company no longer owns any crude oil tankers, he added, compared with 25 vessels totaling 1.485 million tons in 1983.

On the diplomatic front, Foreign Minister Fuad Hussein on Sunday thanked Iran for allowing Iraqi oil tankers to transit Hormuz during a meeting with Iranian ambassador Mohammad Kazem Al Sadeq.

A foreign ministry statement said the two sides discussed mechanisms to ensure implementation of the arrangement and broader regional developments. Hussein reiterated Iraq’s opposition to war and stressed the need for dialogue and peaceful conflict resolution.

Separately, data from the London Stock Exchange Group and analytics firm Kpler indicated that a tanker carrying Iraqi crude had passed through the Strait of Hormuz near Iran’s coast. The vessel, Ocean Thunder, loaded about one million barrels of Basra Heavy crude on March 2 and is expected to discharge in Malaysia in mid-April.

 

 



Saudi Trade Offices Contribute to Creating 2,221 Export Opportunities, Securing 393 New Investments

King Abdullah Economic City port (Economic Cities and Special Zones Authority)
King Abdullah Economic City port (Economic Cities and Special Zones Authority)
TT

Saudi Trade Offices Contribute to Creating 2,221 Export Opportunities, Securing 393 New Investments

King Abdullah Economic City port (Economic Cities and Special Zones Authority)
King Abdullah Economic City port (Economic Cities and Special Zones Authority)

Saudi Arabia’s General Authority of Foreign Trade said Saudi commercial attachés contributed to creating 2.221 export opportunities and secured 393 new investment opportunities, underscoring efforts to expand the Kingdom’s global economic footprint.

The gains came alongside measures to protect domestic industry, including four anti-dumping investigations and five decisions imposing protective duties on imports to ensure fair competition and support Saudi exports abroad.

Established in 2019 as an independent authority, the body is tasked with advancing Saudi trade interests internationally and supporting economic development under Vision 2030.

According to a recent authority report seen by Asharq Al-Awsat, the agency held 25 meetings of its main negotiating team involving Saudi government entities, 75 meetings of related subcommittees and 149 meetings of Gulf technical negotiating teams. It also conducted seven rounds of negotiations between Gulf Cooperation Council states and trade partners.

International Partnerships

The authority carried out 38 overseas visits, participated in or prepared for 39 international forums and conferences, and held 305 technical meetings with domestic and foreign entities.

It launched four anti-dumping investigations into imports, prepared 182 economic reports to support companies and took part in seven international investigations to defend Saudi exports. It also issued five anti-dumping duty decisions covering imports of several products.

The report said the authority continued negotiations with a number of countries to support non-oil exports - goods and services - by securing preferential access to global markets, encouraging and protecting investment, strengthening supply chains and advancing free trade agreements with major economies and blocs.

Diversification Push

The authority said the efforts align with Vision 2030 goals to diversify the economy and strengthen Saudi Arabia’s position in global trade, adding that it was pressing ahead with trade policies aimed at widening the reach of Saudi exports and opening new markets, reinforcing the Kingdom’s ambition to position itself as a global trade hub.

The authority also said it was working with public and private sector partners to develop a more flexible and competitive external trade system while adopting international best practices in trade regulation.

The efforts form part of broader plans to boost the competitiveness of Saudi exports, improve efficiency and build a sustainable, diversified economy in line with the Kingdom’s foreign trade ambitions.


Analysts Say Iran is Drowning in its Own Oil

FILE PHOTO: Iranian flag overlayed with a rising stock graph and 3D printed gas pump miniature are seen in this illustration taken June 23, 2025. REUTERS/Dado Ruvic/Illustration/File Photo
FILE PHOTO: Iranian flag overlayed with a rising stock graph and 3D printed gas pump miniature are seen in this illustration taken June 23, 2025. REUTERS/Dado Ruvic/Illustration/File Photo
TT

Analysts Say Iran is Drowning in its Own Oil

FILE PHOTO: Iranian flag overlayed with a rising stock graph and 3D printed gas pump miniature are seen in this illustration taken June 23, 2025. REUTERS/Dado Ruvic/Illustration/File Photo
FILE PHOTO: Iranian flag overlayed with a rising stock graph and 3D printed gas pump miniature are seen in this illustration taken June 23, 2025. REUTERS/Dado Ruvic/Illustration/File Photo

The US naval blockade is having significant impact on oil flows in Iran, which is running out of places to store its own crude and only about 22 days of capacity left to avoid a crippling production shutdown.

With shipments falling sharply and fuel reservoirs nearly filled, Iran’s storage capacity crisis poses a prominent threat to the country's infrastructure.

Analysts say the country could soon run out of space to store oil — forcing deeper production cuts and potentially triggering long-term damage to its energy system.

According to data firm Kpler, The Wall Street Journal and Bloomberg, the blockade has cut exports by roughly 70%, forcing Iran to revive derelict sites known as “junk storage,” using improvised containers and trying to ship crude by rail to China.

The unusual steps are aimed at delaying an infrastructure crisis and blunting Washington’s leverage in the standoff over the Strait of Hormuz, according to The Wall Street Journal.

Since early April, with the imposition of the naval blockade on Iranian ports, the volume of oil loading onto tankers has dropped from 1.85 million barrels per day in March to only 567 thousand, according to a Bloomberg report.

And despite reports saying some tankers have evaded the blockade, data from Kpler and The Wall Street Journal said no ships have successfully escaped the US blockade of Iranian ports, with officials stating that vessels had been turned back or complied with redirection orders.

Chabahar Port, located east of the Strait of Hormuz and outside the Arabian Gulf, is a critical backup gateway for Iran to circumvent strait-related risks. However, satellite imagery confirms that around six to eight Very Large Crude Carriers (VLCCs) are anchored off the coast of Chabahar in the Gulf of Oman, where the tankers serve as “floating oil storage” unable to break the US blockade.

To manage the crisis, Iran is using new ways to store excess oil that it cannot sell due to the blockade. Tehran has activated the 30-year-old supertanker Nasha for emergency oil storage near Kharg Island.

According to Kpler, the accumulation of oil at sea is substantial. Iran currently holds around 184 million barrels of crude in floating storage, with 60 million barrels trapped within the blockade zone and the remainder located near major Asian trading hubs.

Last week, the US Navy said it forcefully intercepted and turned away two VLCCs.

Iran's onshore crude inventories have risen by about 4.6 million barrels since the blockade to nearly 49 million barrels, according to Bloomberg.

While total storage capacity is estimated at around 95 million barrels if additional northern refinery tanks are included, Kpler said operational constraints, safety limits, and geographic factors mean a significant portion of this capacity may not be practically usable.

This means that Iran has just 12 days of onshore capacity storage left, rising to about 22 days including floating storage, before it is forced to cut production of up to 1.5 million barrels a day as soon as mid-May.


Flight to Stability Boosts Saudi Real Estate

The Saudi capital, Riyadh (SPA)
The Saudi capital, Riyadh (SPA)
TT

Flight to Stability Boosts Saudi Real Estate

The Saudi capital, Riyadh (SPA)
The Saudi capital, Riyadh (SPA)

As geopolitical turmoil redraws the regional investment map, Saudi Arabia is emerging as a “fortress of stability” and a safe haven for capital.

Experts told Asharq Al-Awsat the Kingdom’s real estate sector has been the biggest winner, posting exceptional growth of 20% to 30%.

They said the surge is no coincidence, but the result of strong financial buffers and ambitious structural programs under Vision 2030, which have proved effective in absorbing external shocks and turning regional challenges into sustained growth.

In an economic paradox, the current regional conflict has underscored Saudi Arabia’s appeal as an investment destination, backed by flexible government programs that adapt to shifting conditions.

The impact has been clear in real estate. The sector has benefited from an influx of residents and investors from crisis-hit countries, driving a sharp rise in occupancy across residential and hotel units, and increasing flows of travelers and economic activity into the Kingdom.

Despite pressure on global energy markets, commodities and supply chains, Saudi real estate has moved in the opposite direction, with a clear positive effect. Rental returns across the Kingdom jumped by an average of 20% to 30%, driven by immediate and rising demand.

The trend highlights the Saudi economy’s ability to offer a stable and rewarding investment environment, even in difficult regional and global conditions.

Positive impact

Saudi investor Mohammed Al-Murshid, a member of the Riyadh Chamber of Commerce and Industry and former head of its real estate committee, said the fallout from the current war had a clear short-term positive impact on demand, especially rents in major cities including Riyadh, Jeddah and the Eastern Province.

He said the war was not the main driver, but reinforced an existing trend.

Al-Murshid told Asharq Al-Awsat the effect stemmed from shifts in population movement in countries more directly affected by the conflict. Flight disruptions and partial airspace closures in the Gulf pushed travelers and residents toward Saudi Arabia as a relatively more stable hub.

In some cases, people moved by land to Riyadh as a safe transit point. This created immediate demand for short-term rentals and hotels, put temporary pressure on furnished units, and lifted corporate demand.

“In times of regional instability, companies tend to relocate employees to safer environments and strengthen their presence in more stable economies,” Al-Murshid said.

He said Saudi Arabia benefited from its economic weight and relative security and stability compared with some regional hotspots.

Global inflation has also fed into the market. Higher energy prices, shipping and insurance costs linked to the war have pushed up construction costs.

Global estimates suggest these factors raised property prices by 15% to 20%, reflecting the market’s exposure to supply chain pressures.

Al-Murshid said the war boosted Saudi real estate by 20% to 30%, citing the ability of Vision 2030 programs to absorb shocks, alongside population growth among citizens and residents that continues to drive domestic demand.

Saudi real estate is the biggest winner

Dr. Abdul Rahman Baashen, head of the Al Shorouk Center for Economic Studies, echoed that view, saying the sector has emerged as a leading beneficiary of current geopolitical shifts.

He said the “key” lies in resilient local demand, which has continued to grow on the back of domestic factors despite disruption elsewhere in the region.

Baashen pointed to a key paradox. While global oil supply volumes fell due to the near-total closure of the Strait of Hormuz, the surge in crude prices offset the drop in exports.

The rise in value boosted state revenues, helping sustain government spending on major real estate and infrastructure projects, a core support for the market.

Three drivers

Baashen identified three factors driving momentum:

A temporary surge in demand, fueled by the movement of people and companies seeking stability.

A rise in prices, driven by higher global construction and logistics costs.

A stronger strategic position for Saudi Arabia as a regional investment haven.

He said Saudi real estate is now in a state of “smart balance,” supported by strong domestic demand and additional external demand linked to regional crises.

This mix gives the sector flexibility to adapt to current conditions in the short- and medium-term, while keeping it closely tied to the strength of the Saudi economy.

Reinforcing Saudi Arabia’s position

Baashen and Al-Murshid agreed that the crisis has reinforced Saudi Arabia’s status as a regional investment haven.

They said three forces are shaping that position: strong demand driven by a move toward stability, rising prices in line with global costs, and growing international confidence in the Saudi economy.

They said the sector now rests on solid domestic demand, with added support from external demand linked to regional shifts, sustaining its appeal and performance in the short and medium term.