Iraq offers oil buyers escape route from Strait of Hormuz

Iraq is offering buyers of its crude the option to collect cargoes outside the Persian Gulf for the first time since the war involving Iran began, highlighting the continued flow of Iraqi oil through the strategically vital Strait of Hormuz.

Iraq’s state oil marketer, SOMO, is offering Basrah Medium and Basrah Heavy crude for collection via ship-to-ship transfers near the Omani coast next month, Bloomberg reports.

The move marks a shift in SOMO’s strategy. Since the conflict began, the Iraqi oil marketer had offered significant discounts to encourage traders and refiners to load its crude from terminals deep inside the Gulf, despite heightened security risks.

It remains unclear how SOMO intends to transport the crude out of the Gulf to the Omani coast. However, several major companies have helped move Iraqi barrels to international buyers during the conflict, including Vitol Group and TotalEnergies.

Patrick Pouyanné, chief executive of TotalEnergies, said this week that the French energy major was among the largest traders of Iraqi oil.

The latest tender underscores the resilience of crude exports through the Strait of Hormuz despite persistent security threats in the waterway, one of the world’s most important energy corridors.

Tankers have continued transiting the narrow strait, with some vessels reportedly switching off their tracking transponders to reduce the risk of detection. Continued shipments have helped limit the impact of the conflict on global oil prices.

SOMO also offered fuel oil in a separate tender last week, allowing buyers to collect the cargo either inside or outside the Persian Gulf.

By Vafa Guliyeva