Iraq Sets Premium Prices for Oil Loaded Outside Hormuz

Iraq's national oil company SOMO has set floor prices for its Basrah Medium oil offered via a tender for loading in September from locations outside the Strait of Hormuz. The tender document, reviewed by Reuters, shows that Iraq is asking participants to submit a premium over the destination market benchmark.

SOMO is offering two different pricing structures depending on when the oil will be loaded. For the period between September 1 and 10, it's asking for a minimum premium of 20 cents per barrel over the destination market benchmark. For the period between September 11 and 30, the floor price is set at $3 per barrel premium.

This move comes after Iran granted permission for Iraqi oil tankers to pass through the Strait of Hormuz last month. The trade source confirmed that participants have to place revised offers within a day of receiving the tender document.