Iraq transports oil beyond the Strait of Hormuz for the first time in decades — The National
Iraq’s state-owned Iraqi Oil Tankers Company has transported oil beyond the Strait of Hormuz for the first time in decades. A very large crude carrier (VLCC) transported 2 million barrels of crude outside the strait, The National reports.
Changes to sales terms
Ali Qais, director general of Iraqi Oil Tankers Company, told Iraq’s state news agency INA that the company had been assigned this task for the first time in many decades. Part of Iraqi oil sales is being shifted from the FOB model at the port of Basra to cargo deliveries beyond the strait.
According to Qais, the company held negotiations with specialized firms and chartered a VLCC tanker. This is expected to give the state marketing organization SOMO, or State Oil Marketing Organisation, better opportunities to sell oil and set prices. Iraqi Oil Tankers Company is also negotiating the purchase of its own specialized tankers for transporting crude oil.
More current news is available on the UA.News Telegram channel Telegram.
Dependence on the maritime route
Iraq is OPEC’s second-largest producer and relies on oil for at least 90% of its state revenue. Before the war with Iran began, most Iraqi exports — about 3.3 million barrels per day — were shipped from southern Basra terminals through the Strait of Hormuz.
According to the publication, the war has complicated maritime transportation because of missile and drone attacks, rising insurance costs, and maritime confrontations. Buyers began demanding oil deliveries beyond the strait, while SOMO offered discounts on cargoes loaded in Basra.
Alternative routes
Baghdad is also discussing the resumption of the Iraq–Turkey pipeline via Ceyhan and the transportation of oil by tanker trucks to Syria, although these routes can provide only part of the volumes. Last month, Oil Minister Bassim Khudair said that since the beginning of September, Iraq had been able to export 3 million barrels of oil per day. The government also plans to increase export capacity to 5 million barrels per day after completing strategic pipelines to Fishkhabur and Baniyas, as well as export terminals in the Strait of Hormuz.
