The European Union has established a legal framework allowing member states to sell Russian oil that was previously seized and confiscated in the course of cracking down on sanctions evasion.
The relevant provision is included in EU Council Regulation No. 2026/1848 of July 23, 2026, which formalized the 21st package of sanctions against Russia. The document states the need to enable national competent authorities to safely dispose of shipments of Russian oil that they seize and confiscate. Disposing of the cargo may include selling it to third parties.
However, the new provision does not grant EU authorities the automatic right to stop any tanker simply because it is transporting oil of Russian origin. First, the state must have legal grounds to detain the vessel and confiscate the cargo—for example, a violation of the sanctions regime, the absence of a valid flag, the provision of false documents, or other violations of European, national, or international law.
The new regulation primarily specifies what authorities may do with the cargo after its lawful confiscation. Once the confiscation procedure is complete, the former owner does not automatically receive the right to the proceeds from the sale of the cargo. However, the regulation does not establish a uniform procedure for distributing the proceeds across all EU countries, nor does it provide for their automatic transfer to Ukraine. Such decisions will depend on national legislation and the specific case.
According to Euractiv, the measure is primarily aimed at cargo from vessels used to circumvent EU oil sanctions. The option to sell the cargo is intended to address a practical problem: confiscated oil must be unloaded, stored, and safely sold, which entails significant costs and environmental risks.
The mechanism is part of the 21st EU sanctions package, adopted on July 23. The package also increases pressure on the Russian oil sector, traders, and the shadow fleet, and suspends the automatic review of the price cap on Russian oil until July 15, 2027.
In practice, the new rule may make it easier for EU member states to take action against vessels suspected of circumventing sanctions. However, each detention and confiscation must have a separate legal basis, and the owners of the vessels and cargo will be able to challenge such decisions in national and international courts.
Iraq has estimated the total value of contracts and agreements concluded with American energy companies during Prime Minister Ali al-Zaidi’s July visit to the United States at approximately $200 billion.
Iraqi Oil Minister Basim Mohammed Khudair announced this on July 21. According to him, the projects are expected to increase the country’s production capacity, expand associated gas processing and bring American technologies into the oil and gas industry. The minister estimated Iraq’s current production capacity at 4.8 million barrels of oil per day.
The announced package includes seven key arrangements related to field development, oil and gas asset management, energy infrastructure modernisation and the search for new export routes.
At the same time, the $200 billion estimate does not yet mean that the entire amount has already been formalised as binding capital investment. The package includes contracts, framework agreements, memoranda and preliminary arrangements. The final volume of investment will depend on the results of technical studies, commercial negotiations, the agreement of financing terms and the receipt of regulatory approvals.
Chevron expands its presence in Iraq
The American company Chevron has become one of the central participants in the new energy cooperation.
The company is negotiating its participation in the operation of the West Qurna-2 field, one of Iraq’s largest oil assets, as well as the development of the Nasiriyah field. The parties previously signed preliminary documents concerning Nasiriyah, the Balad field and several exploration blocks in Dhi Qar Province.
During a meeting with Chevron’s management, the Iraqi prime minister called on the company to accelerate investment in oil and gas production and the construction of oil refineries, petrochemical plants, pipelines and storage facilities.
The Iraqi side stated that it was prepared to allocate land plots and expedite administrative approvals for major energy projects. Chevron, in turn, expressed interest in fields in the south of the country and in developing infrastructure for the storage and export of raw materials.
The agreements concerning West Qurna-2 and Nasiriyah remain predominantly preliminary. Before final contracts are concluded, Chevron must examine the projects’ geological, technical and commercial data.
Halliburton to manage the Bin Umar and Sindbad fields
The American oilfield services company Halliburton has received a contract from the state-owned Basra Oil Company for the comprehensive management of the development of the Bin Umar and Sindbad oil and gas fields in southern Iraq.
The contract provides for integrated field management services, as well as support for the design, procurement and construction of the necessary infrastructure.
The involvement of Halliburton is expected to help Iraq increase oil and gas recovery from existing assets, introduce modern reservoir management methods and reduce technological losses.
Another agreement has been concluded with the American company HKN Energy for the development of the Himrin field in the north of the country. The Iraqi government approved the project as part of a broader programme to attract American companies to the oil and gas and electric power sectors.
Iraq seeks alternative oil export routes
One of Baghdad’s strategic objectives is to reduce its dependence on routes through the Persian Gulf and the Strait of Hormuz.
Recent regional crises have demonstrated the vulnerability of Iraq, most of whose oil exports pass through southern terminals. Shipping restrictions and export disruptions have a direct impact on production, budget revenues and the state’s ability to finance infrastructure projects.
Iraq is considering expanding supplies through the Turkish port of Ceyhan and creating a route to the Mediterranean Sea through Syria. The Iraqi and Syrian sides previously discussed transporting oil to the port of Baniyas, including the possibility of restoring existing infrastructure or constructing a new pipeline system.
Chevron is also exploring the possibility of participating in export pipeline and storage projects. If implemented, they would connect the oil fields of southern and northern Iraq with alternative maritime terminals and reduce the country’s dependence on the Strait of Hormuz.
However, such projects will require interstate agreements, large-scale investment and security guarantees. The restoration of pipelines through Syria is complicated by the condition of the infrastructure and the need to ensure the protection of the route along its entire length.
Baghdad turns towards American capital
The current arrangements reflect a broader shift in Iraq’s energy policy towards the United States.
In recent years, Chinese companies have secured a significant share of the country’s new oil and gas projects. Major assets have also been managed by Russian and European operators.
Ali al-Zaidi’s government has announced its intention to give priority to reputable American companies in the energy, telecommunications and technology sectors. To facilitate their entry into the market, the authorities have begun reviewing certain administrative requirements and strengthening the security of oil facilities.
For Iraq, such cooperation is expected to provide access to investment, technologies, oilfield services equipment and political support from Washington. For American companies, the country is attractive because of its large oil reserves, underdeveloped gas sector and need to modernise its infrastructure.
Production growth constrained by OPEC+ agreements
Iraq intends to increase its oil production capacity, but actual production volumes depend on more than investment alone.
The country participates in OPEC+ agreements and is required to comply with the established restrictions. In July, the group’s countries again reaffirmed their commitment to the current arrangements, including the need to compensate for previously exceeding production quotas.
The Iraqi Ministry of Oil previously announced plans to increase production capacity to more than 6 million barrels per day by 2028–2029. Achieving this goal will require the development of new fields, the rehabilitation of existing assets, the expansion of export infrastructure and agreement on a higher quota within OPEC+.
The development of the gas industry remains a separate priority. Iraq is seeking to expand the processing of associated gas, which continues to be flared at fields, and reduce the electric power sector’s dependence on imported fuel.
The authorities plan to increase the utilisation of produced gas to the highest possible level and virtually eliminate its flaring by the end of the decade.
Implementation of agreements will take several years
The package of projects with American companies could become one of the largest investment shifts in the history of Iraq’s oil and gas industry.
However, a significant share of the arrangements remains at a preliminary stage. To proceed to full implementation, the parties must determine the commercial terms, allocation of risks, investment payback periods and security guarantees.
OPEC+ quotas, bureaucratic procedures, the condition of pipeline infrastructure and regional instability remain additional constraints.
If even part of the announced projects is implemented, Iraq will be able to increase oil and gas production, expand processing, reduce its dependence on a single export route and strengthen its position as one of the largest energy producers in the Middle East.
ENERGY, INVESTMENT, IRAQ, OIL, USA
Oil prices are rising sharply on Wednesday afternoon, with the price of Brent crude surpassing the $95-per-barrel mark during trading for the first time since early June.
As of 1:31 p.m., the price of September Brent futures on the London-based ICE Futures exchange rose by $2.83 (3.11%) to $93.84 per barrel. Earlier in the session, prices reached $95.47 per barrel.
WTI crude oil futures for September delivery on the New York Mercantile Exchange (NYMEX) electronic trading platform have risen by $2.69 (3.19%) to $87.03 per barrel.
Both grades are trading at six-week highs amid fears of new disruptions to oil supplies from the Middle East.
The U.S. and Iran continue to exchange blows, with the U.S. military attacking targets in Iran for the 11th consecutive night. Last night, the U.S. military attacked the Iranian port cities of Chabahar and Konarek, located on the coast of the Gulf of Oman, as well as the major industrial center of Tabriz.
In addition, the Yemeni Houthis have announced a blockade of Saudi Arabian ports and are threatening to attack tankers carrying Saudi oil in the Bab el-Mandeb Strait. This strait is a key point on one of the two main routes through which Saudi Arabia exports oil to Asia; the other runs through the Strait of Hormuz.
“We believe that the price of oil will fluctuate between $80 and $90 per barrel depending on the news,” said Jay Hatfield, CEO of Infrastructure Capital Management. “If the Red Sea is indeed closed, prices will jump above $100 per barrel, but we are not seeing that happen yet.”
Meanwhile, the American Petroleum Institute (API) reported yesterday that U.S. inventories rose by 2.6 million barrels last week. Analysts surveyed by Trading Economics had expected a decline of 1.5 million barrels.
The API receives data from refinery operators, oil storage facilities, and pipeline operators on a voluntary basis. Data from the U.S. Department of Energy on oil inventories, which is more important to the market, will be released on Wednesday at 5:30 p.m. local time.
Brent, MIDDLE EAST, OIL, SUPPLY, WTI
During the temporary truce with the U.S., Iran exported about 70 million barrels of oil with an estimated value of $5–6 billion, The Wall Street Journal reported on July 19, citing data from analysts and tanker tracking. China is believed to have been the main end buyer of the crude.
According to the publication, after the U.S. naval blockade was lifted in mid-June, Tehran accelerated the shipment of its accumulated reserves. Starting in late June, about 20 Iranian tankers began arriving off the east coast of Malaysia. Among them, the WSJ names the vessels Diona, Hero II, Sonia 1, and Stream.
At sea, the oil was transshipped from Iranian vessels to other tankers. This ship-to-ship scheme makes it possible to conceal the cargo’s origin, alter accompanying documents, and make it difficult to track shipments subject to U.S. sanctions. After transshipment, the oil was primarily sent to small independent refineries in China.
The TankerTrackers platform previously reported that Iran had exported tens of millions of barrels of crude oil since June 15 alone. By June 24, the volume was estimated at approximately 40 million barrels, of which about 20 million barrels left the country in a single day—June 19.
The U.S. subsequently reinstated the blockade of Iran’s coastline, ports, and oil terminals. The new sanctions regime took effect on July 14 amid renewed hostilities between Washington and Tehran.
The estimate of $5–6 billion reflects the approximate market value of the exported oil. Iran’s actual revenue may have been lower due to discounts granted to Chinese buyers, transportation costs, and fees paid to intermediaries. There is no independent confirmation that the Iranian authorities received the full amount indicated.
The price of Brent crude oil rose on Tuesday afternoon following reports of new U.S. strikes on Iran.
July Brent futures on the London ICE Futures exchange were up $2.57 (2.67%) to $98.71 per barrel as of 2:32 p.m. local time.
Meanwhile, July WTI crude futures on the New York Mercantile Exchange (NYMEX) are currently down $4.26 (4.41%) to $92.34 per barrel. WTI trading was suspended the previous day due to a U.S. holiday.
Captain Tim Hawkins, a spokesperson for U.S. Central Command (CENTCOM), stated that the U.S. military carried out strikes in self-defense “to protect against the threat posed by Iranian forces.” He explained that the strikes targeted anti-aircraft missile launchers and boats that were attempting to lay mines.
In response, the Iranian military warned that a new U.S. attack would not go unanswered, according to the Fars news agency. A senior representative of the local armed forces, Abolfazl Shekarchi, stated that any new aggression against Iran would face a “much harsher” response that would extend beyond the region.
Meanwhile, U.S. Secretary of State Marco Rubio said that finalizing the wording of an agreement between Washington and Tehran could take several days. “Some talks took place in Qatar today, so we’ll see if we can make progress,” he told reporters in Jaipur during an official visit to India.
The Secretary of State reiterated that U.S. President Donald Trump intends to conclude an agreement with Iran, adding that it is important to restore shipping in the Strait of Hormuz.
“We are still awaiting details of a potential deal,” noted Giovanni Staunovo of UBS. “At the same time, we are seeing rising tensions in the Middle East, and shipping through the Strait of Hormuz remains restricted.”
British energy company BP announced the acquisition of a 40% stake in a production-sharing agreement covering six oil and gas exploration blocks in the Ustyurt region of Uzbekistan. This marks the company’s return to traditional energy investments.
BP had previously scaled back its exploration activities in the region in 2021 as part of a “green” energy strategy adopted under former CEO Bernard Looney, who committed to reducing oil and gas production by 40% by 2030.
Since then, the company has refocused on fossil fuels.
“We believe Uzbekistan has significant resource potential and view this as an opportunity to support the exploration and development of the country’s oil and gas resources,” said Joe Cristofoli.
BP, GAS, OIL, UZBEKISTAN
