Tehran has begun shipping individual tankers with Iraqi oil through the Strait of Hormuz. The decision was made after a series of appeals from Baghdad, which were transmitted through various channels, including a visit to Iraq by the speaker of the Iranian parliament, Mohammad Bagher Ghalibaf.
The scale of the problem for the Iraqi side was outlined by Prime Minister Ali al-Zeidi: due to the situation around the strait, Iraq's oil exports have decreased to about 10% of the usual level. Alternative export routes exist, but their capacity is limited, and some of them are improvised.
A significant part of the exported oil and petroleum products from the Persian Gulf countries passes through the Strait of Hormuz. Any change in the conditions of passage is reflected in the routes of carriers, delivery times and the cost of transportation far beyond the region.
For cargo owners and charterers, the practical meaning of the news boils down to one question: how many permits will be issued and with what frequency. Single passes will keep rates and insurance premiums at current levels. The regular issuance of permits will signal a review of the war risk allowances, which have multiplied this season and are included in the cost of each shipment crossing the gulf.
What should be done now. When booking for September, request the lines and insurers to disclose the structure of the surcharge: base rate separately, war risk premium separately. The precedent for issuing permits gives grounds to require a review if the conditions of passage stabilize, and to fix this in the contract with a clause on recalculation of the premium in case of regime change.
The second is to keep the land option well developed. The North—South corridor through Azerbaijan and the Caspian Sea remains a reserve for companies that transport cargo to Iran and the Gulf countries in case the permit procedure remains spot-based until the end of the year.
