Iraq's SOMO Offers Deep Discounts on Basrah Crude to Encourage Loadings Inside Strait of Hormuz
Move comes as shipping traffic slows following reported vessel attacks, with Basrah crude discounted by up to $29.80 per barrel.
ERBIL (Kurdistan24) — Iraq's state oil marketer has offered steep discounts on August-loading Basrah crude to encourage buyers to continue lifting cargoes from export facilities inside the Strait of Hormuz, according to a Reuters report published on Monday.
A document reviewed by Reuters showed that Iraq's State Organization for Marketing of Oil (SOMO) invited its term buyers to nominate their contractual volumes of Basrah Medium or Basrah Heavy crude on a free-on-board (FOB) basis from the Basrah Oil Terminal or Iraq's single-point moorings and associated offshore loading facilities.
To attract buyers despite heightened security concerns in the Gulf, SOMO offered discounts of between $25 and $27 per barrel for Basrah Medium crude relative to the relevant destination benchmarks, depending on the loading window.
For Basrah Heavy crude, the discounts ranged from $27.80 to $29.80 per barrel, according to the document.
The pricing incentives come as commercial shipping activity through the Strait of Hormuz has shown signs of slowing following reports of attacks on vessels in the strategically vital waterway.
Shipping data cited by Reuters indicated that visible traffic through the strait declined over the weekend amid growing security concerns.
One very large crude carrier (VLCC), Noble, which loaded Iraqi Basrah crude on July 25, exited the Strait of Hormuz on Friday and is currently en route to China.
Separately, shipping fixtures showed that PetroChina has provisionally chartered the VLCC Jamaica Prosperity to transport crude from Iraq's Basrah port to China.
The developments underscore the challenges facing oil exporters operating in the Gulf as geopolitical tensions continue to affect maritime trade and energy markets.
The discounts come amid heightened security concerns in the Strait of Hormuz, where a series of maritime incidents were reported. On Tuesday, the United Kingdom Maritime Trade Operations (UKMTO) said a cargo vessel was struck by an "unknown projectile" approximately 20 nautical miles northeast of Al Khasab, Oman.
Two days earlier, another tanker reported hearing an explosion nearby in the same area, although no injuries or damage were reported.
The Strait of Hormuz remains one of the world's most critical energy chokepoints, carrying a significant share of global seaborne crude oil and liquefied natural gas exports, making any disruption to shipping closely watched by global energy markets.