Iraqi oil’s future stability hinges on strait of Hormuz

January 12 — Adnan Al-Janabi, the former head of the Parliamentary Energy Committee, underscored the critical role of the Strait of Hormuz in maintaining the stability of Iraqi oil, in a context where Iraq is poised to be less affected by the global reduction in oil dependency.

In an interview covered by 964media, Al-Janabi offered detailed insights:

On the Security of Iraqi Oil: “As long as the maritime path through the Strait of Hormuz is stable, Iraqi oil is safe,” Al-Janabi stated, emphasizing the strategic importance of this channel for Iraq’s oil exports.

The Threat to Global Oil: Al-Janabi expressed concern over regional security, saying, “The only real fear that could impact not just Iraq’s but the world’s oil supply is any security instability in the Arabian Gulf region, particularly in the Strait of Hormuz.”

Strategic Export Routes: Discussing Iraq’s current export strategies, Al-Janabi noted, “Iraqi oil, within its OPEC quota, can currently secure exports solely through its southern outlet in the Gulf. However, strategically this is not correct. It’s essential to work on adopting multiple export routes to avoid a repeat of the situation with the Turkey pipeline. The closest alternative is the Aqaba outlet via Jordan.”

Future of Iraqi Oil: Looking towards the future, Al-Janabi highlighted Iraq’s advantageous position, “Iraqi oil has one of the lowest depletion and extraction costs in the world. In the future, when the demand for oil decreases due to a shift to alternative energy, the question will be: who will continue to export? The clear answer is those with the lowest production costs and significant reserves will find it easier to continue exports.”

Preparing for the Future: Despite these advantages, Al-Janabi urged for proactive measures: “Iraq must prepare and develop its production and export capabilities for the future, alongside continuous investment in the oil sector. We need to be ready for the moment when export restrictions are lifted, aiming for a production capacity of 6 million barrels per day.”