Iraq Tells Buyers To Collect Crude Which Can Now Cross Hormuz, While US Boosts Ship Reinsurance Guarantees To $40BN
Over the long weekend, we reported that with traffic across the Hormuz strait continuing to rise, and reaching the highest since the war began, one particularly favorable development was Iran's permission for Iraqi ships to use the Strait. We also noted that this declaration had the potential to unleash as much as 3 million barrels a day of Iraqi oil cargoes.
That said, there was the caveat that it was not immediately clear if the exemption will apply to all Iraqi oil or just the nation’s tankers, or indeed how it will be enforced. Furthermore, an Iraqi official cautioned that the usefulness of the exemption will depend on whether shipping companies are willing to risk entering the strait to collect cargoes.
Today Iraq underscored this last point when the Gulf state told traders and refiners they can collect crude cargoes as vessels carrying the country’s oil are now able to transit the Strait of Hormuz thanks to an Iranian exemption, testing buyers’ confidence in the security guarantee.
In a notice sent on Sunday, the country’s State Organization for Marketing of Oil, known as SOMO, said Iraqi shipments were now “exempt from any potential restrictions,” citing media reports.
It asked buyers for lifting schedules, including vessel details and volumes requested, adding all loading terminals including Basrah were “fully operational.” Customers were given 24 hours to respond.
As previously reported, Iran said over the weekend that its neighbor was now free from shipping restrictions around the vital waterway. The country’s military spokesman did not provide details on whether the arrangement applied to vessels or cargoes.
The Turkish-owned tanker Ocean Thunder, carrying a million barrels of Iraqi crude to Malaysia crossed the narrow waterway after the announcement.
An oil tanker transporting Iraqi oil crossed the Strait of Hormuz (following the "new" maritime route through Larak Island, in Iranian territorial waters).
— Hydra Fella NAFO (@Hydra_Fella) April 5, 2026
The "Suezmax"-class vessel Ocean Thunder transports 1 million barrels of crude oil (and, in the past, also carried… pic.twitter.com/SBJnwmdZRi
As Bloomberg notes, Iraq often sells oil on a free-on-board (FOB) basis, meaning refiners sort out their own shipping, but it has struggled to export crude since the effective closure of Hormuz a month ago.
Asian buyers reached by Bloomberg said they were seeking clarity on conditions, including whether Iraq would offer the use of its own tankers, thereby providing extra security, although judging by Iraq's comments it is inviting buyers to send their own tankers.
Separately, the Iraqi Basra Oil company announced that Iraq can restore oil exports to 3.4 million barrels per day within a week if Hormuz shipping resumed.
Meanwhile, in hopes of kickstarting frozen traffic - and potentially taking over the lucrative shipping insurance market from London - on Friday the US announced it would double to $40 billion its commitment to provide reinsurance guarantees to ships willing to travel through the Strait of Hormuz with the addition of new insurance partners, including AIG and Berkshire Hathaway. The move was the latest US effort to ease worries over the vital waterway and to encourage traffic to resume.
Recall a month ago the US International Development Finance Corp. announced a $20 billion reinsurance program. On Friday, the agency said Travelers, Liberty Mutual Insurance, Berkshire Hathaway, AIG, Starr and CNA will join Chubb to provide an additional $20 billion in reinsurance for the agency’s maritime facility.
“Along with Chubb, these leading American insurers bring deep underwriting experience in marine and marine war coverage, strengthening our efforts to help restore confidence in maritime trade,” DFC Chief Executive Officer Ben Black said in a statement.
The DFC also said in the statement that the agency and insurance partners will determine which vessels are eligible for the reinsurance facility. To qualify, the DFC is requiring applicants to provide, among other details, the origin and destination country of the vessel; major beneficial owners of the ship and domicile; owner of the cargo and domicile of the owner; and information about the lenders financing the vessels.
Trump on Friday reiterated his frustration over the strait’s closure and the failure of allies to help the US reopen the waterway.
“With a little more time, we can easily OPEN THE HORMUZ STRAIT, TAKE THE OIL, & MAKE A FORTUNE,” Trump said in a social media post. It wasn’t immediately clear what actions the president was considering.
Shippers remain doubtful, though, of a wholesale return to the Strait of Hormuz even after Trump’s promise to protect ships and his primetime speech on Wednesday in which he repeated that the war will soon end. The key concern about traversing the sea route is that it puts the lives of crews at risk as Iran continues to threaten vessels with drone attacks, missiles and water mines.
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