Foreign media report Iraq is scrambling to find buyers for this month’s Gulf
loadings after the State Organization for Marketing of Oil (SOMO) last week
sharply narrowed discounts, effectively raising offered prices. SOMO had earlier
used steep discounts to entice traders amid higher shipping costs and elevated
risks transiting the Strait of Hormuz. The Iraqi government is seeking to
charter tankers willing to transit the strait. Buyers remain reluctant to lift
in the Gulf; some regional producers offer ship‑to‑ship transfers in the Gulf of
Oman to avoid Hormuz but still need onward export routes. Saudi Arabia continues
to supply from the Gulf and left its flagship Arab Light October price
unchanged, surprising markets that had expected a large increase. SOMO’s option
to allow liftings from non‑Gulf locations has not been implemented, partly
because current pricing does not attract enough firms to undertake Hormuz
shuttle operations.
