Iran has granted Iraqi ships transit rights through the Strait of Hormuz, a critical oil chokepoint. A tanker carrying 1mn barrels of Iraqi oil, the Ocean Thunder, passed near Iran's coast on Sunday, signaling a potential end to the waterway's effective closure since February 28th. Iran's military spokesman declared Iraqi vessels exempt from restrictions imposed on 'hostile states,' a move that could allow up to 3mn barrels per day of Iraqi oil to reach global markets. This development comes as Iraq, the world's fifth-largest oil producer, faces an economic crisis due to the strait's closure, losing an estimated $224mn daily in revenues.

The move aims to restore Iraqi oil exports, which plummeted to a fraction of its 3.4mn barrels per day capacity. Iraq's full resumption of exports hinges on shipping companies' willingness to resume transit through the contested strait, a process complicated by the need to restart halted production. The Strait of Hormuz normally handles about a fifth of the world's oil shipments, making its reopening a significant market factor.