Iraq Says Buyers Bear Responsibility for Oil Tankers After Basrah Shipments Leave Port

ERBIL (Kurdistan24) — Iraq's Oil Ministry said on Tuesday that oil tankers carrying Iraqi crude continue to transit the Strait of Hormuz, stressing that responsibility for transporting shipments lies with buyers once cargoes leave Iraqi export terminals.

Salim Al-Rikabi, spokesperson for the Oil Ministry, said the ministry continues to sell crude oil under a "free on board" (FOB) mechanism, under which ownership and responsibility for the cargo are transferred to the buyer at the port of loading.

"After the tankers leave the port and pass through the Strait of Hormuz, the ministry bears no responsibility for their routes or for obtaining the necessary approvals," Al-Rikabi told the Iraqi News Agency (INA).

He said that while it is correct that tankers carrying Iraqi crude transit the Strait of Hormuz after loading, the ministry has no role in determining their movements once they depart.

"The Oil Ministry sells crude oil at the port, after which the buyer assumes responsibility for transporting and managing the shipment," he said.

Al-Rikabi added that the ministry does not own the tankers transporting Iraqi crude and has no connection to their operations after they leave the export terminals.

He noted that some of the vessels carry cargoes of up to two million barrels of crude oil.

Despite this, Al-Rikabi said the ministry continues to monitor the movement of oil tankers through global vessel-tracking systems, while Iraq's State Organization for Marketing of Oil (SOMO) follows shipments until they arrive at their destination refineries.

Commenting on exports, Al-Rikabi said Iraq's oil sales have shown a gradual improvement in recent months.

"Last month was better than the one before it, and the previous month was better than the one preceding it," he said, describing the trend as evidence of a steady recovery compared with the period immediately following the export disruptions linked to the Strait of Hormuz.

The remarks come amid heightened concerns over maritime security in the Gulf following a series of reported incidents involving commercial vessels in the Strait of Hormuz, one of the world's most strategically important energy chokepoints.

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.

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.

Iraq, OPEC's second-largest oil producer, exports most of its southern crude through the Gulf, making uninterrupted shipping through the narrow waterway critical to global energy supplies.

Recent security incidents have prompted some shipping operators to exercise greater caution, although Iraqi officials say crude exports have continued and export performance has steadily improved.