Iraq's Oil Exports Soar as Buyers Take Advantage of Discounts

Iraq's oil exports surged in August as buyers took advantage of discounted prices and Iranian permission for tankers to pass through the Strait of Hormuz. The country boosted its daily exports to around 2.34 million barrels per day, a significant increase from July's level of 1.35 million bpd.

The recovery is attributed to Iraq's state oil marketer SOMO offering August-loading cargoes from the Basrah terminal at discounts of $25 to $30 a barrel on a free-on-board basis. This drew in major buyers, including Chinese state majors PetroChina and Zhenhua Oil, as well as TotalEnergies, Vitol, Trafigura, Mercuria, and Cathay Petroleum.

The wide profits for traders have incentivized them to find shipping options to get the cargoes out. For example, PetroChina loaded 6 million barrels in July and August from the terminal, while also chartering tankers to lift Iraqi crude. Chinese refiners have bought at least 16 million barrels of Basrah crude for September arrival.