Minimum feeding standards and keeping a prohibition of live exports during the hottest periods were recommended to mitigate the risk of heat stress and improve animal welfare during the trip.
The department wants prohibition periods between June and mid-September to remain for Kuwait and other Persian Gulf nations aside from Oman.
But periods when extra conditions need to be met to conduct live exports to the Persian Gulf, other than to Kuwait and Oman, should be expanded by 10 days, it says.
The department further recommended Oman's prohibition be reduced by a month, from May 8 to a new date of August 14 and stoppages of exports to the Red Sea reduced by three weeks to September 7.
It also recommended boat trips through the Red Sea to nations such as Russia, Turkey and Lebanon should also be subject to the same embargo period.
The department found sheep were visibly impacted by heat on nine out of 15 summer trips to the Middle East between 2019 and 2021.
The Greens attempted in parliament to disallow the export of live sheep, saying the practice was "cruel".
"The entire live export industry should be shut down, and it should be shut down as soon as possible," Greens senator Mehreen Faruqi said in early September.
"It's beyond repair. Its social licence has well and truly expired. It cannot be made safe for animals."
But the push failed following opposition from Labor and the coalition.
Prime Minister Anthony Albanese went to the election promising to ban the trade, which has been criticised by animal welfare groups but generates thousands of jobs and millions of dollars in export revenue.
But Mr Albanese said the phase out would not happen during this term of parliament, which is expected to run until 2025.
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