Iraq Moves 2 Million Barrels Of Crude Beyond Strait Of Hormuz In First Such Operation In Decades

Iraq’s state-owned Iraqi Oil Tanker Company has moved 2 million barrels of Iraqi crude oil beyond the Strait of Hormuz on a very large crude carrier (VLCC). 

It is the first time in decades that the company has carried Iraqi crude beyond the strait. The company chartered the VLCC after speaking with several specialised firms. 

The ship was loaded with 2 million barrels of crude and then carried the cargo beyond the Strait of Hormuz, the company’s Director General Ali Qais Abdul Jabbar said on Saturday, according to the Iraqi News Agency (INA).

Earlier, crude was delivered at the Port of Basra, and buyers arranged their own tankers to collect it. This time, the Iraqi Oil Tanker Company arranged the tanker and took the crude beyond the strait.

Qais said this would give the Iraqi Oil Marketing Company (SOMO) more options when selling Iraqi crude. It could also give SOMO more flexibility when negotiating prices.

The Iraqi Oil Tanker Company has not carried Iraqi-produced crude beyond the Strait of Hormuz in decades, according to Qais. In the usual arrangement, buyers sent large tankers to Basra, near the head of the Persian Gulf, to collect the crude.

The latest shipment was handled differently. The Iraqi company chartered the VLCC and arranged for the oil to be taken beyond the Gulf.

The supplied information says this could help Iraq reach refiners that do not want to send their own vessels through the Strait of Hormuz. It could also help SOMO find better prices for its crude and reduce the discounts needed to attract buyers to its southern terminals.

Qais said the company was working to improve its ability to transport crude and compete with similar companies in the region. The Iraqi Oil Tanker Company is also looking at buying its own crude oil tankers.

Qais said the company had been instructed to speak with the relevant authorities and look for opportunities to purchase and own specialised tankers as soon as possible.

The latest VLCC was chartered for the shipment. Buying its own tankers would allow the company to build up its own fleet and increase its capacity to transport Iraqi crude.

The company also wants to strengthen its position against other shipping companies in the region.

Iraq’s southern crude exports normally pass through the Strait of Hormuz when they leave the Persian Gulf for international markets.

According to the supplied information, Iraq had previously obtained permission from Iran for Iraqi oil tankers to pass through the strait.

Iran has effectively closed the waterway during its conflict with the United States.

References: Sana, Reuters