Iraq has begun offering crude oil buyers deliveries outside the Persian Gulf for the first time since the start of its war with Iran, Bloomberg reported.
State oil marketer SOMO is making Basrah Medium and Basrah Heavy grades available via ship-to-ship transfers off the coast of Oman starting next month.
The move represents a strategic shift for Iraq, which had previously offered refiners and traders major discounts to load crude directly inside the Persian Gulf following the outbreak of the war.
It remains unclear how SOMO intends to transport the oil out of the Gulf. Several international firms have assisted in delivering Iraqi crude to global buyers during the conflict, including Vitol Group and TotalEnergies SE.
Patrick Pouyanne, chief executive officer of French energy company TotalEnergies, stated this week that his firm was among the largest traders of Iraqi crude. TotalEnergies and Vitol Group are major global commodity traders operating in international energy markets.
Strait of Hormuz shipping routes
Offering crude outside the Strait of Hormuz indicates that oil exports from the Persian Gulf continue despite constant threats of attack. Tanker vessels frequently navigate the narrow channel with their location transponders turned off, and steady shipment volumes have helped restrain global crude price increases.
SOMO, formally the State Oil Marketing Organization, handles all official crude exports for Iraq. The Strait of Hormuz is a narrow maritime chokepoint between Oman and Iran connecting the Persian Gulf to open ocean trade routes, making it a critical conduit for global oil supplies.
Last week, SOMO also issued a separate tender offering fuel oil, giving buyers the option to collect cargoes either inside or outside the Persian Gulf.
Iran and Oman maritime agreement
Earlier, Iran's Islamic Revolutionary Guard Corps reported that Iran and Oman reached an agreement to divide the waters of the Strait of Hormuz and share shipping revenues. IRGC representatives claimed the United States attempted to obstruct the bilateral talks, alleging that Washington's interference delayed the final deal.
The Islamic Revolutionary Guard Corps is a major branch of the Iranian military that oversees regional security and maritime operations in the Gulf.
Developments in the Strait of Hormuz directly influence global energy markets. On August 26, crude oil prices fell by more than $2 per barrel following reports of negotiations between Iran and Oman regarding the potential resumption of shipping.
