Iraq is working to identify alternative export routes for its crude as the Strait of Hormuz — the chokepoint that carries roughly a fifth of the world's oil — remains exposed to regional escalation, Al Jazeera reports.

The effort is operational, not theoretical. Most Iraqi crude loaded from Gulf terminals must transit Hormuz, and any prolonged disruption there would leave Baghdad with limited spare capacity to move barrels to market. Iraq exports a substantial share of its production through the Basrah terminal complex on the Gulf, with the remainder flowing north through the Kirkuk-Ceyhan pipeline to Turkey's Mediterranean coast.

The northern route is Baghdad's most obvious hedge. The Kirkuk-Ceyhan line gives Iraq direct access to Mediterranean loading without a Gulf transit, but its throughput has been constrained for years — first by the pipeline's physical condition and later by the shutdown that followed the 2023 arbitration ruling between Baghdad and Ankara over Kurdish export rights. Its capacity, even when fully operational, falls well short of what Basrah loads on any given day, so the pipeline can offset only part of a Hormuz outage.

Iraq has also studied overland options before. A crude pipeline to Jordan's port of Aqaba, on the Red Sea, has appeared in Iraqi planning documents for more than a decade without reaching construction. Red Sea loading would bypass both Hormuz and Bab el-Mandeb's Gulf-side exposure, though the project remains at the study stage rather than sanctioned.

The push comes amid heightened regional tension. Israeli strikes on Iranian energy infrastructure earlier this month briefly knocked out production at some Iranian fields and raised the specter of tanker traffic interference in Hormuz, before a ceasefire took hold. The episode appears to have sharpened Baghdad's focus on route diversification, Al Jazeera reports.

Iran, which borders the strait, has repeatedly warned it could close the waterway in response to attacks — a step Tehran has never fully taken, in part because its own crude and LNG exports depend on the same corridor. Traders nonetheless price a tail risk into freight and insurance rates for Gulf loading whenever the rhetoric sharpens.

For Iraq, the stakes are larger than for most producers. The country pumps around 4 million bpd and depends heavily on oil revenue to fund its budget, leaving little fiscal room for a sustained export outage. Saudi Arabia, by contrast, operates the East-West pipeline with roughly 5 million bpd of capacity to Red Sea terminals at Yanbu and has repeatedly demonstrated it can reroute volumes when Gulf loading is threatened. Iraq lacks an equivalent artery.

In the near term, Baghdad's realistic options are limited. The Kirkuk-Ceyhan line offers the only existing bypass, and restoring it to sustained full flow depends as much on Baghdad-Ankara and Baghdad-Erbil relations as on pipeline mechanics. The Aqaba pipeline and any revived pipeline proposals through Saudi Arabia to Yanbu remain concepts, not steel in the ground.

The watch items: progress on restarting and debottlenecking the northern export system, any movement on a sanctioned investment decision for a Red Sea route, and whether Hormuz risk premiums in tanker rates retreat or persist through the ceasefire's duration.