/Agencia Reuters
Both Iraq and Pakistan have closed deals with Iran to transport oil and liquefied natural gas (LNG) from the Gulf, according to five sources with knowledge of the matter, in a demonstration of Tehran’s ability to control energy flows through the Strait of Hormuz.
The war of the United States and Israel with Iran has drastically reduced energy exports from a region that normally supplies 20% of the world’s crude oil and LNG.
“The U.S. has blocked Iranian ports in recent weeks. And although initially Iran sought to stop traffic through the strait, that stance is now changing,” said Claudio Steuer, from the Oxford Institute for Energy Studies.
“Iran has gone from blocking Hormuz to controlling access to it. Hormuz is no longer a neutral transit route, it is a controlled corridor,” he added.
Given that most of its crude oil exports are usually shipped through the strait, Iraq was one of the producers most affected by its closure.
Meanwhile, Pakistan, which has tried to mediate in the conflict, is heavily dependent on energy imports from the Gulf and has faced a drastic increase in fuel costs.
In a previously unreported agreement between Baghdad and Tehran, Iraq guaranteed the safe passage of two very large crude carriers (VLCCs), each carrying about 2 million barrels of crude oil, which crossed the strait on Sunday, May 10.
Iraq is currently working to obtain Iran’s approval for further transits, an Iraqi Oil Ministry official familiar with the initial agreement and ongoing talks told Reuters, as the government seeks to safeguard oil revenues that represent 95% of its budget.
“Iraq is a close ally of Iran, and any deterioration in the Iraqi economy would also harm Iran’s economic interests in the country,” the official said.
A second Iraqi oil ministry official and a shipping industry source also confirmed the talks with Tehran. All sources requested anonymity as they were not authorized to speak on the matter.
Similarly, two tankers loaded with Qatari LNG are heading to Pakistan following a separate bilateral agreement between Islamabad and Tehran, two industry sources with knowledge of the matter told Reuters, who also asked not to be identified as they were not permitted to speak to the media.
Pakistan received approximately 10 LNG cargoes per month before the war and now must meet the high summer electricity demand for cooling.
Neither Iraq nor Pakistan have made direct payments to Iran or its Islamic Revolutionary Guard Corps (IRGC) in connection with the transits, the sources indicated.
Qatar did not directly participate in the bilateral agreements, according to the two industry sources, but informed the United States before the shipments to Pakistan.
Pakistan’s Ministries of Petroleum and Information did not immediately respond to requests for comment.
Nor did the Ministry of Foreign Affairs of Qatar.
Other countries are exploring similar agreements, according to sources familiar with the discussions, as rising energy costs and supply disruptions weigh heavily, particularly on Asian economies.
“As more governments show willingness to cut deals with Iran for passage, there is a risk of normalizing the idea that Iran will control the Strait of Hormuz more permanently,” said Saul Kavonic, head of research at consultancy MST Marquee.
Before the war, about 3,000 vessels transited through Hormuz each month. Currently, traffic is around 5% of that level, according to navigation data.
The disruption has caused Brent crude to surge more than 50% since the outbreak of the conflict in late February. LNG prices in Europe and Asia have jumped approximately between 35% and 50%.
Iran says it wants to maintain control over the strait after the war. It has demanded reparations, the lifting of sanctions, and access to frozen assets as part of any agreement; conditions that U.S. President Donald Trump called “garbage,” dashing hopes for a deal to end the conflict.
Meanwhile, Iran is formalizing its control over the strait, according to industry sources. And it has asked Iraq to submit documentation for each tanker to facilitate transit through designated maritime routes under the supervision of its naval forces, reported one of the Iraqi Oil Ministry officials.
Specialized teams from the Iraqi Oil Ministry are providing Iranian authorities with detailed information on each vessel, including destination, shipping details, ownership, and cargo specifications, to help avoid incidents.
A Pakistani source aware of the negotiations with Iran on vessel passage noted that there have been some setbacks in the process. “The IRGC sometimes changes the rules of the game, so it is difficult to keep things under control, but we are working on it,” he said.
