US institute says Iraq-Gulf partnership could help diversify oil exports

ABU DHABI, United Arab Emirates — A report by the Washington-based Foundation for Defense of Democracies says Iraq is struggling to maintain oil exports after regional conflict and the closure of the Strait of Hormuz reduced shipments from a previous 3.4 million barrels per day to roughly half that level. The analysis notes that petroleum revenues still fund about 90 percent of Iraq's budget, making new export channels a fiscal priority. The report says Iraq's state oil marketer SOMO announced sales to Abu Dhabi National Oil Company, with ADNOC moving crude through the Gulf via so-called dark transit out of the Strait of Hormuz, most of it destined for Asian buyers. The study warns the route carries risk, pointing to Iranian threats in the strait and recalling the UAE's condemnation of an Iranian attack on two ADNOC vessels. According to the FDD, about 90 percent of Iraqi production comes from southern fields, and northern pipeline infrastructure remains inadequate. The Iraq-Turkey Pipeline and overland shipments via Syrian and Jordanian ports are described as the main alternatives, though the report says Ceyhan throughput has not exceeded 200,000 barrels per day. The institute estimates Iraq earned around $2 billion in May and June, against monthly public-sector payroll and pension needs of roughly $6 billion, and argues that a US-backed partnership with Gulf states could both diversify Iraqi export routes and curb Tehran's regional leverage.