The Iraqi State Organization for Marketing of Oil (SOMO) has shifted towards adopting indirect maritime shipping methods to ensure Iraqi crude reaches Asian markets. This move aims to confront the current navigational challenges and geopolitical disruptions in the Strait of Hormuz.
Ali Nizar Al-Shatari, the Director General of SOMO, confirmed that the Abu Dhabi National Oil Company (ADNOC) has become one of the main buyers and transporters the company deals with, alongside global companies such as TotalEnergies and Vitol. Al-Shatari explained that Iraq sells its oil to entities capable of loading, moving, and securing the crude outside the Strait of Hormuz.
The new mechanism relies on "shuttle shipping" tactics implemented by ADNOC's trading arm. Ships make short trips within the Gulf waters, then transfer the shipments by unloading them onto other tankers outside the waterway. This allows for the uninterrupted flow of supplies to buyers and refineries, particularly in the Indian and Asian markets, by leveraging its modern tanker fleet and partnerships with major maritime shipping groups.
These operational solutions run in parallel with a package of price discounts offered by SOMO to attract buyers and encourage shipping companies to load cargo. The discounts ranged between $25 and $27 per barrel for Basra Medium crude, and between $27.80 and $29.80 per barrel for Basra Heavy crude for August shipments.
These measures have quickly translated into a rebound in Iraq's seaborne exports. The daily export rate has risen to approximately two million barrels per day during the current month of August, marking a significant recovery compared to the sharp declines recorded in the first half of the year due to the regional crisis.
