Oil tankers during loading operations at an Iraqi offshore export hub located in the Arabian Gulf. Photo: SOMO
Baghdad (IraqiNews.com) — Iraq is providing buyers the option of collecting petroleum from Oman, establishing a new loading point outside the Arabian Gulf as Baghdad strives to keep oil earnings coming despite disruptions in the Strait of Hormuz.
According to Bloomberg, SOMO, Iraq’s state oil marketer, is selling Basrah Medium and Basrah Heavy for September loading via ship-to-ship transfers along the Omani coast.
The agreement would see Iraqi petroleum delivered through Hormuz before being transferred to buyer boats near Oman, eliminating the need for clients to ship their tankers far into the Arabian Gulf to fill at Basra.
The decision comes after months of interruption in Iraq’s southern exports due to the US-Iran war.
Baghdad has offered high discounts to persuade importers to continue loading inside the Gulf.
According to Argus statistics quoted in publications, Iraq’s southern oil exports increased to roughly 1.4 million barrels per day in July from 100,000 bpd in May but remained much lower than pre-war levels of more than 3.3 million bpd.
The Oman agreement does not abolish Iraq’s reliance on Hormuz, since oil must still transit the strait.
However, it provides Baghdad with another method to lessen risks for purchasers while still protecting oil sales, which account for the majority of government revenues.