Key facts
- Iraq's crude oil exports via the Strait of Hormuz surged to approximately 2.34 million barrels per day in August.
- This represents more than a doubling of exports compared to 1.35 million bpd in July.
- Iran has reportedly allowed Iraqi oil tankers to transit the Strait of Hormuz.
- Iraq has been offering substantial discounts on its Basrah crude to incentivize buyers.
- Chinese and Indian refiners are major recipients of this discounted crude.
Iraq, OPEC's second-largest oil producer, significantly boosted its crude oil exports through the Strait of Hormuz in August, more than doubling volumes from the previous month. The increase to approximately 2.34 million barrels per day was driven by substantial discounts offered on its Basrah crude and permission granted by Iran for Iraqi tankers to transit the critical chokepoint.
These higher export volumes, while still below pre-war levels, are expected to benefit refiners in India and China that are equipped to process Iraq's heavier, higher-sulfur crude. Analysts noted that Iraq's heavy discounts have incentivized buyers to secure shipping options for the crude.
Chinese refiners alone are estimated to have purchased at least 16 million barrels of Basrah crude for September delivery. The transit permission from Iran offers some relief to Iraq's oil-dependent economy, which had been impacted by reduced revenues due to blockages of the Strait of Hormuz.