Iraq offers crude buyers a way around the Strait of Hormuz for the first time since war began

When a waterway handles roughly a fifth of the world’s oil and becomes a war zone, the math for energy markets gets uncomfortable fast. Iraq just made that math a little less terrifying. Iraq’s state oil marketing company, SOMO, issued new tender terms on August 27 allowing buyers of Basrah Medium and Heavy crude to take delivery via ship-to-ship transfer near the Omani coast. It is the first time since the Iran war began in February 2026 that buyers have had the option to collect Iraqi oil without transiting the Strait of Hormuz. From 3.3 million barrels a day to 100,000 and back again To understand why this matters, rewind to the early months of the conflict. Iraqi southern oil exports were running above 3.3 million barrels per day before the war started. By May, that figure had collapsed to roughly 100,000 barrels per day, a drop of more than 97%. The cause was straightforward: buyers simply refused to send tankers into a live combat zone. Discounts offered to entice buyers grew extraordinary, reaching as steep as $33.40 per barrel for Basrah Medium in May. Even at that price, the market was thin. By August, exports had clawed back to around 2 million barrels per day, still well...