Iraq Seeks Oil Loading Plans Amid Iran's Strait of Hormuz Exemption

Iraq's state oil marketer, SOMO, has requested its customers to submit crude oil lifting schedules within 24 hours, following reports that Iran has exempted Iraq from restrictions on transit through the Strait of Hormuz. This development comes as Iraq aims to stabilize its oil exports, which have significantly declined, with production dropping to approximately 800,000 barrels per day in March.

The Jerusalem PostThe Straits Times

The Strait of Hormuz, a critical maritime passage for global oil shipments, has been a focal point of tension due to ongoing conflicts involving Iran, the United States, and Israel. The Iranian navy has indicated that the strait will undergo permanent changes in response to these conflicts, particularly affecting the operations of American and Israeli vessels. Iran has begun allowing select non-Iranian ships to transit the strait, imposing substantial fees for passage.

The Jerusalem Post

In a document issued on April 5, SOMO emphasized the need for timely submission of lifting schedules to ensure the continuity and stability of crude oil export operations. The document reassured customers that all loading terminals, including the Basrah Oil Terminal, remain operational and that SOMO is prepared to execute all contractual lifting programs without limitations.

The Straits Times

Despite Iraq's push to resume oil exports, market participants express skepticism regarding the willingness of shipowners to send tankers into the Gulf amid the ongoing U.S.-Israeli conflict with Iran. The potential risks associated with navigating through a region marked by military tensions raise concerns about the feasibility of Iraq's oil export plans.

The Jerusalem Post

While SOMO's call for lifting schedules indicates a readiness to resume oil exports, there is uncertainty regarding the actual shipping operations. The ongoing conflict and Iran's military posture in the region create a complex environment that may deter shipping companies from entering the Gulf, leading to conflicting assessments about the future of Iraq's oil exports.

The Straits Times

• “In light of the above, and to ensure the continuity and stability of crude oil export operations, we urge your esteemed company to submit its lifting schedules within 24 hours to enable the timely processing of your lifting programs, including vessel nominations and the contractual volumes, in full alignment with the agreed terms and conditions,” — SOMO Document

The Straits Times

• “The Strait of Hormuz will never return to its pre-war state, the Iranian navy command announced on Twitter/X on Monday morning.” — Iranian Navy Command on Twitter/X

The Jerusalem Post

As Iraq navigates the complexities of resuming oil exports, stakeholders will closely monitor developments in the Strait of Hormuz and the broader geopolitical landscape. The interplay between regional tensions and oil market dynamics will be crucial in determining the success of Iraq's export initiatives in the coming weeks.

The Jerusalem Post