Bloomberg: Iraq offers steep discounts on crude oil amid Strait of Hormuz risks

Iraq is offering steep discounts on crude oil for May shipments, but buyers face mounting risks tied to tanker transit through the Strait of Hormuz amid escalating regional hostilities.

Discounts of up to $33.40 per barrel are being offered on Basrah Medium crude for cargoes loading between May 1 and 10, Caliber.Az reports, citing Bloomberg.

A notice from Iraq’s state oil marketing company SOMO said that by the end of the month, the discount narrows to $26 per barrel.

Basrah Heavy is being offered at $30 below official selling prices.

The May 3 document obtained by Bloomberg stresses that force majeure does not apply to this offer, as it is issued under exceptional conditions already known to all parties.

Bloomberg notes that the Strait of Hormuz has remained largely impassable since fighting began in late February.

A renewed wave of violence between the United States and Iran has cast doubt on a four-week ceasefire.

The agency adds that export volumes from Basra dropped sharply in April as tankers struggled to enter the Persian Gulf.

By Bakhtiyar Abbasov