Iraq Offers Oil Outside Persian Gulf for First Time Since Iran War Began

Iraq's state oil trader has made a significant move by offering buyers the option to collect oil outside the Persian Gulf for the first time since the start of the Iran war. According to Bloomberg, SOMO (Iraq's state oil marketer) is offering Basrah Medium and Basrah Heavy crude via tender with loading scheduled for September through ship-to-ship transfers off the coast of Oman.

This shift in approach marks a departure from Iraq's previous strategy of offering significant discounts to traders and refiners to encourage them to load Iraqi oil deep within the Persian Gulf. The move indicates that oil continues to flow from the Persian Gulf despite the persistent threat of attacks in the Strait of Hormuz, with vessels often transiting the strait with their transponders turned off.

It's worth noting that several companies, including Vitol Group and TotalEnergies SE, have helped supply Iraqi oil to global buyers during the war. The US Army has also managed to create an effective corridor through the Strait of Hormuz, allowing for approximately half of the pre-war volume of 20 million barrels per day to be transported out of the Persian Gulf.