Iraq, the second-largest crude producer within OPEC, experienced a significant reduction in its oil exports during May and June, with daily volumes plummeting to just over 500,000 barrels. This sharp decline resulted in revenue of approximately $2.3 billion for the period, a fraction of its typical oil earnings. The primary cause for this export disruption is the continued closure of the Strait of Hormuz, a critical chokepoint for global oil shipments.
For freight forwarders and shippers involved in the energy sector, this situation indicates a severe constriction of crude oil supply from Iraq to international markets. The closure of the Strait of Hormuz directly impacts vessel routing and transit times for tankers, potentially leading to increased freight rates and longer lead times for oil and gas shipments originating from or transiting the Persian Gulf. Forwarders should anticipate higher bunker prices and war risk premiums for any vessels operating in the region, alongside potential capacity constraints for crude oil tankers.