Iraq approves three month mechanism to export crude via local, international firms

Iraq is seeking to diversify its oil export channels and maintain flexibility in marketing its crude amid the Iran war and the closure of the Strait of Hormuz.

Iraq's cabinet approved mechanisms for exporting Iraqi crude through specialized international and local companies and via multiple export outlets, the government said on Tuesday.

The contracts under the new mechanism will run for three months starting September 1, according to a statement issued after the cabinet meeting.

Iraq is seeking to diversify its oil export channels and maintain flexibility in marketing its crude amid the Iran war and the closure of the Strait of Hormuz, which has disrupted regional oil flows and created uncertainty around shipping routes.

Iraq developed alternate export routes

Iraq has worked to develop alternative export routes in addition to its traditional southern terminals, including routes through Turkey and Syria, as it seeks to reduce reliance on Gulf shipping routes.

Iraq is OPEC's second-largest oil producer and relies heavily on crude exports for state revenue. Most of its exports are shipped from terminals in the southern Gulf, leaving the country particularly exposed to disruptions in the Strait of Hormuz.

The government did not immediately provide details on the companies to be selected, the volumes to be exported under the mechanism, or the specific export outlets covered by the contracts.