Interactive · Iraq

Iraq without Hormuz

Since March the strait that carries nine in ten of Iraq's barrels has been shut. The pipelines that could have gone around it were closed, seized or never built. This model asks what that has cost.

By Mohammed A. Baban · 21 October 2026 · Data to 19 October 2026 · Written for SOAS POL7008 Energy Policy and Geopolitics, Week 4

Iraq pumped about 4.3 million barrels a day before the war and sold about 3.4 million abroad, almost all of it loaded at Basra and shipped through the Strait of Hormuz. Oil pays for nearly the whole state. When the strait closed, output fell to about 1.3 million barrels a day and the treasury lost an estimated $60bn in seven months. Salaries need about 11 trillion dinars a month; in August, oil brought in about 2.5 trillion.

Every other Gulf exporter with a bypass is selling. Saudi Arabia pipes crude across the peninsula to Yanbu and the Emirates pipe theirs to Fujairah. Iraq's only working bypass, the line to Ceyhan in Türkiye, restarted in March. The map shows the rest.

Figure 1Iraq's export routes

Oct 2026

Basra, by tanker through Hormuz Iraq–Türkiye Basra–Aqaba Kirkuk–Baniyas IPSA Closed or never built Neighbours' bypass lines

Borders, coastlines and rivers: Natural Earth (1:10m). Pipeline routes are approximate. Volumes are monthly averages from the model below.

Figure 2

Exports

Million barrels a day, by route

Figure 3

Oil revenue and the salary bill

Trillion dinars a month

Figure 4

The street dollar

Dinars per $100

Source: model calibrated to Basra Oil Company, Kpler, Iraqi government and market reports; see notes. Shaded: Hormuz shut. Dotted line: selected month.

Where it goes from here

An interim US–Iran agreement has opened a 60-day window, and the strait is starting to move again. Lecture 4 set out three ways it could go, with Energy Intelligence's probabilities. Pick one to drive the map and the charts above; the figures in each card run to June 2027.

Scenarios and probabilities: Energy Intelligence, presented in SOAS POL7008 Week 4, slide 4.3 ("Mideast war scenarios"). Export and price paths for each scenario are this model's reading of the descriptions.

How the world coped, and why that did not help Iraq

Figure 5Filling a 21 million barrel a day hole

What replaced oil lost through Hormuz, million b/d. Dashed line: the loss. Figure above each bar: net change in global supply.

Source: SOAS POL7008 Week 4 lecture, slide 3.1, "Physical market adjustments to falling supply from Strait of Hormuz".

In March the gap was filled by oil already at sea. By May it was stock draws, strategic reserves and China buying less: buffers that protect consumers. None of them moves an Iraqi barrel.

"Alternative Mideast exports", 3.0 rising to 4.8 million barrels a day, are mostly Saudi crude on the East–West line and Emirati crude through Fujairah. Iraq's part is its northern flow to Ceyhan. The market steadied; Iraq's budget did not.

Chokepoints are "areas where one country holds a dominant position and there are few, if any, substitutes."Edward Fishman, on economic chokepoints

Iraq's expansion is "hindered by … limited export capacity from its southern fields."IEA, Oil 2025

Figure 6Who can get around HormuzBypass pipeline capacity to a port outside the Gulf, million b/d

Saudi East–West line to Yanbu, expanded towards 7 million b/d; UAE Habshan–Fujairah, 1.5; Iran Goreh–Jask, about 0.3 in practice; Iraq–Türkiye, 0.75 contracted from August 2026. Approximate public figures.

The pipelines that never were

Iraq has tried to escape the Gulf for forty years. Each route around it was closed by a war, seized by a neighbour or stalled at home, and several of those decisions trace back to Iran and its allies.

Did Iran keep Iraq in the Gulf?

The case for

In 1982 Syria, Iran's only Arab ally in the Iran–Iraq war, shut the Kirkuk–Baniyas line and cut Iraq's Mediterranean outlet.
The Basra–Aqaba line, agreed in 2013 and revived in 2019 and 2023, stalled under opposition from Iran-aligned factions, who cast it as a gift to Jordan and, through Jordan, to Israel.
Drone strikes on Kurdish oil and gas fields between 2022 and 2025 were widely attributed to Iran-aligned militias, eroding the northern route.
The cabinet completed this month includes a US-sanctioned Asaib Ahl al-Haq leader as deputy prime minister. The factions that blocked the bypasses now sit inside the state that needs them.

The case against

IPSA, the biggest lost line at 1.65 million b/d, went to Saddam's invasion of Kuwait, not to Iran. Saudi Arabia shut it in 1990 and took it over in 2001.
The Iraq–Türkiye line stopped in 2023 over an arbitration ruling and the Baghdad–Erbil revenue dispute.
The 2010 Iraq–Syria pipeline deal died in Syria's civil war.
While Hormuz stayed open, tankers were cheaper than long pipelines through unstable neighbours. No government paid for insurance against a closure.
Southern oil cannot reach northern routes until the Basra–Haditha line, approved only at the end of 2024, is built.

What the case teaches

Chokepoints. Oil supply is more diverse than in the 20th century, yet a single strait can still cut it. Hormuz flows fell from about 20.6 million b/d in February to about 6 million in September.

Buffers. Spare capacity, stockpiles and new non-OPEC supply kept prices from a 1970s-style spike, as Almutairi, Pierru and Smith (2025) argue for earlier shocks. Buffers belong to consumers. A producer's only buffer is another way out.

The rentier state. Where oil rents pay the salaries, an export shock is a fiscal shock: payroll, central bank reserves and the street dollar move together.

Geoeconomics. Fishman describes coercion that "operates below the threshold of armed conflict". Iran's leverage over Iraq runs through the strait it can close and through the allies who kept the routes around it from being built.

Questions to argue over

Was Iraq's dependence on Hormuz a geological fact, an economic choice or a political outcome?
The world absorbed a 21 million barrel a day loss within three months. For whom was that resilience real, and for whom was it not?
In the 1990s the US blockaded Iraq's oil with UN backing and naval patrols. What changes when a regional power can close the same waters without either?
If you advised Baghdad today, which bypass would you build first, and how would you get it past the factions that stopped the last ones?

How the model works. Monthly volumes from March 2026 are estimated from reported anchors: pre-war exports of about 3.4 million b/d; 90–94% of exports blocked; the Iraq–Türkiye line restarting at about 250 kb/d in March, with 750 kb/d contracted from August; escorted Basra cargoes from 4 October; and about $60bn of revenue lost by late September. Brent follows reported levels (about $103 in mid-September, near $100 in October), with Basrah grades $4 below. Revenue is converted at the official rate. The street-dollar premium rises with cumulative lost revenue as central bank reserves drain, calibrated so October matches the rate set above. It is illustrative, not a forecast. Counterfactual pipelines use design or agreed capacities (Basra–Aqaba 1.0, Iraq–Syria heavy line 1.5, IPSA 1.65, Iraq–Türkiye 1.4 million b/d), scaled by wartime utilisation. Northern and western routes are limited to northern output plus the 2.25 million b/d Basra–Haditha feeder, and total exports are capped at the pre-war level.

Sources. Al Jazeera, 28 Sep 2026 · Kurdistan24 · EnergyNow, Apr 2026 · The National, 4 Oct 2026 · The National, 18 Mar 2026 · The National, 1 Aug 2026 · CNBC, Jun 2026 · Vortexa · Iraqi News, 19 Oct 2026 · Shafaq News · Channel8 · Al Quds · Al Jazeera, 16 Oct 2026 · TASS, Sep 2026 · IEA, Oil 2025 · E. Fishman, Goldman Sachs Global Institute dialogue on economic chokepoints · H. Almutairi, A. Pierru and J. L. Smith (2025), Energy Economics 144 · Natural Earth.