With natural gas prices climbing,…
Beijing has cut the crude…
Iranian officials have reassured Iraq that there would be freedom of navigation in the Strait of Hormuz, the most critical oil shipping lane in the world, the Iraqi oil ministry said on Tuesday.
“Iranian President Hassan Rouhani (gave) reassurances to the Iraqi delegation ... around guaranteeing freedom of navigation in the Gulf and Strait of Hormuz and respect for international law guaranteeing that,” Reuters quoted Iraq’s oil ministry statement as saying.
Iraqi Prime Minister Adel Abdul Mahdi was visiting Tehran on Monday, where Iran’s President Hassan Rouhani said, “Iran has been, and will be, the main guardian of security and freedom of navigation in the Persian Gulf, the Strait of Hormuz and the Sea of Oman during history.”
According to the official website of the Iranian president, Rouhani emphasized “that the Islamic Republic of Iran is not willing to escalate tensions in the region and with other countries, and will never initiate war and tension.”
Tensions in the region and in the Strait of Hormuz have been escalating in recent weeks, the latest incident being Iran seizing a British oil tanker on Friday.
For Iraq, the Persian Gulf and the Strait of Hormuz, which Iran has repeatedly threatened to block, are the key export routes of more than 3 million bpd of Iraqi crude oil from its southern ports lying on the Persian Gulf.
Cutting off Iraq’s crude oil exports would be disastrous for the country, which relies very much on oil revenues to support its budget. Therefore, the Persian Gulf and the Strait of Hormuz are the lifelines for Iraqi state revenues, industry analyst Ruba Husari told AFP in June.
As tensions continue to flare in the Middle East, Iraq’s Prime Minister Adel Abdul Mahdi warned earlier this month that any disruption in the oil exports flowing through the Strait of Hormuz would be a “major obstacle” for Iraq’s economy.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.