Iraq plans large crude tankers for state fleet after years-long shipping pause

BAGHDAD — Iraq’s state oil tanker company has finished feasibility studies for buying large crude carriers and has resumed shipping crude after years of inactivity, the Oil Ministry said Tuesday, as the minister seeks government funding for the purchase.

“The ministry is working in coordination with the government to provide the necessary financial allocations to purchase oil tankers for the Iraqi Oil Tankers Company,” Oil Minister Basim Mohammed Khudair said. The aim is to rebuild the company’s fleet to match Iraq’s export needs and give it a larger share of moving the country’s crude.

“The company is ready to assume its national responsibility and resume transporting crude oil with an Iraqi fleet and Iraqi crews,” said its director general, Ali Qais Abdul-Jabbar, adding that economic and feasibility studies were complete and the company would proceed once approved. It has carried about 2 million barrels in recent operations, the ministry said. Neither said how many tankers it wants, what they would cost or when they would be bought.

Economist Ziad al-Hashimi urged the minister on Sunday to wait, warning that tanker prices are at record highs because of the U.S.-Iran war and that demand for shipping will fall once the crisis ends. He proposed chartering vessels first to build experience, and warned of the risk of commissions and inflated prices in shipbuilding contracts.

Iraq has relied almost entirely on foreign tankers. SOMO sells crude free on board at the port and the buyers’ tankers negotiate passage with whoever controls the Strait of Hormuz, government spokesperson Haider al-Aboudi said last month, adding that Iraq has no exemption to move oil through the strait. A state fleet would put the Iraqi government itself in that position.

The plan comes as revenues covered only 76% of salaries and welfare in the first seven months of the year, and as a lawmaker says the finance minister has proposed devaluing the dinar in the 2027 budget. The Transport Ministry’s Iraqi Line is separately due to restart container shipping from Jebel Ali to Umm Qasr on Oct. 15.