Iraqi oil sales impacted by shipping costs
According to Bloomber, the Iraqi oil marketing company, SOMO, is facing difficulties in selling its exported crude shipments due to rising shipping costs and the withdrawal of some traders. The company only offered the oil to two firms at the last minute. Shipping a barrel from the Gulf of Oman to East Asia via supertankers costs around $20, which increases the selling price and reduces profit margins. Iraq, which is located inside the Gulf and is distant from the Strait of Hormuz, faces greater challenges in finding buyers and carriers. This has led to discounts on Basra Medium and Basra Heavy crudes to stimulate demand, amid warnings that ongoing inability to find buyers or vessels could disrupt the oil market further and impact prices.
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