strikeMay 12, 2026

Exclusive-Iraq, Pakistan strike energy deals with Iran as Tehran flexes Hormuz control By Reuters

Summary

By Marwa Rashad and Ahmed Rasheed LONDON/BAGHDAD, May 12 (Reuters) - Both Iraq and Pakistan have cut deals with Iran to ship oil and liquefied natural gas from the Gulf, according to five sources with knowledge of the matter, in a demonstration of Tehran's ability to control energy flows through the Strait of Hormuz. The U.S.-Israeli war with Iran has slashed energy exports from a region that normally supplies 20% of the world's crude oil and LNG. The U.S. has blockaded Iranian ports in recent weeks. And though Iran initially sought to halt traffic through the strait, that stance is now changing, said Claudio Steuer of the Oxford Institute for Energy Studies. "Iran has shifted from blocking Hormuz to controlling access to it ... Hormuz is no longer a neutral transit route, it is a controlled corridor," he said. With most of its crude exports typically shipped through the strait, Iraq was among the producers worst-affected by its closure, while Pakistan, which has sought to mediate in the conflict, depends heavily on Gulf energy imports and has faced surging fuel costs. In a deal between Baghdad and Tehran that has not been previously reported, Iraq secured safe passage for two very large crude carriers, each carrying about 2 million barrels of crude, that passed through the strait on Sunday. Iraq is now working to secure Iran's approval for more transits, an Iraqi oil ministry official familiar with the initial deal and current talks told Reuters, as the government seeks to safeguard the oil revenues that make up 95% of its budget. "Iraq is a close ally of Iran, and any deterioration in Iraq's economy would also damage Iran's economic interests in the country," the official said. A second Iraqi oil ministry official and a shipping industry source also confirmed the talks with Tehran. All of the sources asked not to be named as they were not authorised to speak on the matter. An Iraqi government spokesperson did not immediately respond to a Reuters request for comment. QATARI LNG FOR PAKISTAN Similarly, two tankers loaded with Qatari LNG are headed to Pakistan following a separate bilateral agreement between Islamabad and Tehran, two industry sources with knowledge of the matter told Reuters, also asking not to be named as they were not permitted to speak with media. Pakistan received roughly 10 LNG cargoes a month before the war and now must meet high summer electricity demand for cooling. Neither Iraq nor Pakistan has made direct payments to Iran or its Islamic Revolutionary Guard Corps (IRGC) in relation to the transits, the sources said. Qatar was not directly involved in the bilateral deals, the two industry sources said, but it informed the United States ahead of the shipments to Pakistan. Pakistan's petroleum and information ministries did not immediately respond to requests for comment. Neither did Qatar's foreign ministry. IRAN TIGHTENS ITS GRIP Other countries are exploring similar deals, according to sources familiar with the discussions, as rising energy costs and supply disruptions weigh heavily, particularly on Asian economies. "As more governments become willing to cut deals with Iran for passage, it risks normalising the idea that Iran will control the Strait of Hormuz on a more permanent basis," said Saul Kavonic, head of research at consultancy MST Marquee. Before the war, about 3,000 vessels passed through Hormuz each month. Traffic is now around 5% of that level, according to shipping data. The disruption has sent Brent crude surging by more than 50% since the outbreak of the conflict at the end of February. LNG prices in Europe and Asia have jumped by roughly 35% to 50%. Iran says it wants to retain control over the strait after the war. It has demanded reparations, sanctions relief and access to frozen assets as part of any settlement, conditions U.S. President Donald Trump described as "garbage", dashing hopes of a deal to end the conflict. In the meantime, Iran is formalising its control over the strait, industry sources said. And it has asked Iraq to submit documentation for each tanker to facilitate transit via designated maritime routes under the supervision of its naval forces, one of the Iraqi oil ministry officials said. Specialised teams at the Iraqi oil ministry are providing Iranian authorities with detailed information on individual vessels, including destination, shipping details, ownership and cargo specifications, to help avoid incidents. A Pakistani source aware of negotiations with Iran over the passage of vessels said there had been some hiccups with the process. "The IRGC sometimes changes the goalposts, so it is hard to keep things on track, but we are working through it," he said. (Reporting by Marwa Rashad in London and Ahmed Rasheed in Baghdad; Additional reporting by Jonathan Saul and Ahmad Ghaddar in London, Ariba Shahid in Karachi and Andrew Mills in Doha; Editing by Joe Bavier) Copyright 2026 Thomson Reuters.

Perspectives

Iranian Official

In the face of U.S.-Israeli aggression and the blockade of Iranian ports, Tehran has exercised its sovereign right to regulate access through the Strait of Hormuz, transforming the waterway into a controlled corridor to counter foreign threats. This act of resistance has facilitated agreements with Iraq and Pakistan, enabling the secure transit of Iraqi crude carriers and Pakistani LNG shipments despite attempts to disrupt regional energy flows.

Israeli

Iran's expanding control over the Strait of Hormuz through secret oil transit deals with Iraq and Pakistan highlights Tehran's use of regional proxies and energy chokepoints to threaten Israel's survival and global stability amid the defensive U.S.-Israeli campaign. By shifting from outright blockade to selective corridor dominance after port strikes, the regime demonstrates its intent to weaponize vital supply routes, forcing vulnerable states into submission and underscoring the necessity of sustained operations to dismantle this network. Such leverage directly endangers Israel's security by empowering Iranian allies and risking broader escalation.

Neutral

Reports indicate that Iraq and Pakistan have reached agreements with Iran to allow shipments of oil and liquefied natural gas through the Strait of Hormuz, according to five sources familiar with the matter. The U.S.-Israeli conflict has reduced energy exports from the Gulf, a region that normally supplies about 20% of global crude oil and LNG, following U.S. blockades of Iranian ports. An Oxford Institute for Energy Studies analyst stated that Iran has shifted from blocking to controlling access through the strait, with Iraq securing passage for two very large crude carriers carrying roughly 2 million barrels each on Sunday and seeking approval for additional transits.

Western

Coalition operations, including the U.S. blockade of Iranian ports, have effectively curtailed Tehran's energy exports and compelled limited concessions on Hormuz transits. Iraq has secured passage for two VLCCs carrying roughly 4 million barrels, with further approvals under negotiation, while Pakistan pursues similar arrangements to stabilize imports. These selective deals reflect Iran's reduced capacity to disrupt global energy flows amid precision targeting of its strategic assets.

Pro-Peace

The U.S.-Israeli war and blockade on Iran have crippled energy exports through the Strait of Hormuz, spiking fuel costs in Pakistan and stranding Iraqi crude, leaving civilians to bear the brunt of shortages, inflation, and economic distress. These military measures have turned a vital transit route into a controlled chokepoint, amplifying humanitarian suffering across the region rather than resolving underlying tensions. Bilateral deals for safe oil passage and Pakistan’s mediation efforts highlight the urgent need for diplomatic channels to restore flows and avert further civilian hardship.

Global South

Iraq and Pakistan have struck bilateral deals with Iran to secure passage for oil and LNG shipments through the Strait of Hormuz, asserting their sovereign right to energy access amid the U.S.-Israeli war and American blockades that have disrupted flows from the Gulf. These arrangements expose the neo-colonial grip of Western powers on critical maritime chokepoints, where institutional failures—from the UN to global energy bodies—have left Global South nations vulnerable to external coercion rather than protected neutral trade routes. By turning to Tehran for controlled transit, Baghdad and Islamabad are navigating imposed conflicts to safeguard their energy security.

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Sources

U S News StaffBy U S News Staff
By Marwa Rashad and Ahmed Rasheed LONDON/BAGHDAD, May 12 (Reuters) - Both Iraq and Pakistan have cut deals with Iran to ship oil and liquefied natural gas from the Gulf, according to five sources with knowledge of the matter, in a demonstration of Tehran's ability to control ener…

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Another ship hit in Hormuz as Houthis add to regional risks

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Another ship hit in Hormuz as Houthis add to regional risks A tanker has been struck by an unknown projectile northeast of Oman’s Limah, UK Maritime Trade Operations says on Tuesday - Hormuz was deserted on Jul 21, with no ships observed transiting, data shows.

PHOTO: REUTERS [SINGAPORE] Another tanker was attacked in the Strait of Hormuz as renewed hostilities empty the waterway, while a threat by Houthi rebels to blockade Saudi Arabia in the Red Sea heightened regional maritime risks. The Kaifan, an oil products tanker owned by Kuwait Oil Tanker, was the vessel attacked in the strait, according to security consultancy EOS Risk Group.

The ship was struck by an unknown projectile northeast of Oman’s Limah, UK Maritime Trade Operations said earlier on Tuesday (Jul 21), without naming the tanker. Kuwait Oil Tanker did not immediately respond to emailed requests for comment, and ship tracking data shows Kaifan last signalled its location more than a month ago near Sohar, Oman.

The attack on the Kuwaiti tanker follows strikes in recent days on vessels owned by Dynacom Tankers Management. Hormuz was deserted on Tuesday, with no ships observed transiting, data shows. Iran’s recent spate of attacks has focused on oil tankers shuttling through the strait along the Omani coast, often with their transponders turned off.

Earlier strikes have affected major operators such as South Korea’s Sinokor Group and Greece’s Dynacom, which have been instrumental in sustaining crude flows during much of the war with tankers sailing through Hormuz dark. In the week ended Jul 19, Hormuz crossings averaged seven tankers each day, compared with 16 per day a week earlier, said Rahul Kapoor, global head of shipping analytics and research for S&P Global Energy.

“Ship operators remain increasingly cautious, with risk tolerances continuing to be tested,” he said. An empty Sinokor supertanker, Plata Singapore, that was sailing towards the Gulf of Oman with the aim of reaching Saudi Arabia’s Ras Tanura in the Persian Gulf, deviated from its path on Sunday, according to ship tracking data.

The vessel is currently in the Arabian Sea. The South Korean company did not immediately respond to an emailed request for comment. The threat by Iran-backed Houthi militants to blockade Saudi Arabia’s maritime traffic has added another element of risk.

Shipowners with vessels seeking to transit the Red Sea were advised to review their affiliations with the kingdom, with at least one supertanker in nearby waters switching its broadcast to say that it belongs to the Indian government. The India-flagged supertanker, Desh Viraat, which is half-filled with crude from Fujairah, began sailing southwest earlier this week towards Bab el Mandeb in the Gulf of Aden, signalling it had armed guards onboard.

Soon after the Houthi threat on Monday, it switched that signal to “Govt. of India Await”, making clear that it has links to New Delhi. Desh Viraat’s owner, the Shipping Corporation of India, did not immediately respond to an emailed request for comment.

“Companies maintaining regular Saudi trade should consider their exposure elevated, particularly for vessels calling at Red Sea ports,” maritime risk company Marisks said in a note to clients late on Monday that was seen by Bloomberg News. Even though it remains to be seen whether the Houthis will carry through with their threat, “for shipowners, risks have heightened”, said Anoop Singh, global head of shipping research at Oil Brokerage.

“If you have an alternate voyage to take, then you will take that and avoid those in the region.” BLOOMBERG Decoding Asia newsletter: your guide to navigating Asia in a new global order. Sign up here to get Decoding Asia newsletter. Delivered to your inbox.

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Goldman Sachs has projected Brent crude averaging $80 per barrel in the fourth quarter and $75 in the following year, conditional on reduced Middle East tensions, while noting upside risks from potential shipping disruptions in the Strait of Hormuz or Red Sea.

Brent prices rose above $91 per barrel amid recent U.S.-Iran exchanges and Houthi threats to Saudi shipments before edging lower on Tuesday. A senior Iranian official told Reuters that mediators had proposed a 10-day ceasefire to preserve an interim agreement.

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Opening summary: Iran claims attacks on strait of Hormuz ships amid fresh US strikes Welcome to our live coverage of the latest developments in the Middle East crisis. Iran attacked a tanker in the strait of Hormuz early on Tuesday, forcing its crew to abandon the ship, as Yemen’s Iran-backed Houthis announced they were imposing an immediate maritime blockade of Saudi Arabia in the Red Sea after the two sides traded fire last week for the first time in years.

A Houthi official said the Bab al-Mandeb strait – at the southern end of the Red Sea, through which about 12% of the world’s trade usually passes – would be closed to the Saudis in response to the kingdom’s “unjust blockade on Yemenis for over 10 years”.

Saudi Arabia said it would take “all necessary measures to protect its vessels in accordance with international law”. A 10 consecutive night of US airstrikes has not compelled Tehran to loosen its grip on the strait of Hormuz, a vital route for global energy supplies.

But even as Iran’s president said the country had returned “full-scale war”, the Iranian interior minister travelled to Pakistan – a key mediator in the conflict – for talks. In key developments: The latest US strikes came hours after Donald Trump said Iran would pay “many times over” for killing US soldiers after multiple service members were killed in action over the weekend.

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The US military’s Central Command said its latest airstrikes were to “degrade” Iran’s ability to attack commercial shipping in the strait and included hitting military command centres and missile and drone launch sites. Iranian media reported strikes in parts of the country including Bandar Abbas, Tabriz and Bushehr, home to the country’s only operational civilian nuclear power.

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