Iraq — home to the world’s third-largest oil reserves — is actively rebuilding its oil tanker fleet and maritime logistics to support expanding exports. With OPEC+ production quotas rising and increased output potential, Iraq’s ambition to regain control over its shipping capacities offers compelling opportunities for energy investors and shipping partners.
Keywords: Iraq oil tanker market, Iraqi Oil Tankers Company, Gulf tanker opportunities, Iraq crude shipping, oil tanker investments Iraq.
OPEC+ recently approved phased increases in Iraqi oil production — from ~4.0 mbpd in April 2025 to potentially 4.11 mbpd by January 2026. Absent a parallel growth in shipping capacity, Iraq risks bottlenecks, higher freight costs, and third-party exposure. This gap underscores growing demand for additional tanker tonnage — from medium-range (MR) product tankers to Suezmax-class vessels, and potentially more Very Large Crude Carriers (VLCCs).
In a bid to leverage shipping gains and national revenues, Iraq’s Ministry of Oil and state-owned Iraqi Oil Tankers Company (IOTC) are initiating plans to rejuvenate the country’s tanker fleet. Historically, IOTC owned ~24 vessels before the 1991 Gulf War. Recent contracts — including the proposed acquisition of additional MR and VLCC vessels — reflect renewed strategic interest in maritime capability.
This trend matches regional patterns: Gulf NOCs like Saudi Aramco and QatarEnergy are expanding their fleets with national shipping lines to lock-in margins. For Iraq, the goal is similar — regain cost control, ensure timely deliveries, and retain more profit in the value chain.
Iraq’s shipping ambitions include inviting bids for oil shipping development, allowing international partners to participate. At the same time, the state-backed AISSOT JV (IOTC + Arab Maritime Petroleum Transport Co) has been set up with exclusive mandates for product trading, chartering, and owning storage-linked vessels in global hubs like Dubai and Singapore.
These moves signal Iraq’s openness to strategic partnership, where investors can bring in capital, expertise, and fleet management experience. Additionally, general openness to shipping JV models aligns with regional shipping developments and port upgrades, especially around the Grand Faw Port — an emerging oil export gateway tied to the Development Road corridor.
Southern Iraq’s Al Basrah Oil Terminal (ABOT) and Khor al Amayah Oil Terminal (KAAOT) are critical export points, connected via onshore pipelines and moored at Single-Point Moorings (SPMs) that can service Suezmax and VLCC vessels. With ABOT capable of handling up to ~3 mbpd and plans to expand further, Iraq must secure tankers that match terminal capacity, minimize demurrage, and optimize load cycles.
For investors, this integration offers:
Even as demand grows, regional security risks—like Houthi attacks in the Red Sea—pose navigational threats. Additionally, maritime activity near the Persian Gulf and Hormuz Strait requires oversight and insurance premium adjustments. Iraq must engage in maritime security constructs, such as the International Maritime Security Construct (IMSC) patrolling regional waters.
Opportunities arise for vessel charter models featuring compliance, vetting, and enhanced vessel tracking — all attractive to insurers and financiers.
An added layer of complexity arises from shadow-fleet activity in Iraqi waters. According to OFAC, multiple handysize vessels, sometimes registering to disguise origin, are involved in Iranian oil transport via STS transfers near Basra and Khawr Al Zubair to evade sanctions. Reports also indicate Iranian tankers have been using forged Iraqi documents.
For legitimate investors, this creates both risk and opportunity:
Global tanker charter markets were robust in 2024 due to Red Sea disruptions . As Iraq reloads both crude and product exports, regional spot rates will remain high — with medium-range (MR) vessels especially in demand — boosting charter returns.
Potential strategies include:
Iraq’s JV discussions and ship tenders emphasize newbuild vessels with higher efficiencies, reduced emissions, and digital intelligence for real-time route adjustments. GCC expansions show clean-fuel, dual-fuel, and scrubber-equipped vessels coming online. Similarly, Iraq is expected to follow — mandating environmental upgrades, and aligning with IMO 2023 low-sulphur mandates.
For investors, clean-fuel tankers and smart shipping platforms offer value:
Iraq now offers diversified entry points:
These can be structured using Build-Own-Operate (BOO) models paralleling modular refinery and terminal investments.
Key risks include:
Mitigation tactics:
Iraq’s revival of its tanker vessel market is more than an economic move — it’s a strategic re-entry into global energy logistics. From restoring sovereign control via IOTC and AISSOT to meeting rising crude quotas and terminal capabilities, the timing is ripe.
Output growth, port expansions, JV openness, and Gulf-wide fleet upgrades show Iraq aligning with broader NOC-led fleet strategies. For investors, shipping presents a high-leverage complement to refinery, storage, pipeline, and port investments — with upside from charter rates, integrated deals, and long-term control.
