Key facts
- Vitol purchased at least 25 million barrels of Iraqi crude for September loading.
- Iraq offered September crude at discounts of $15 to $20.80 per barrel.
- Vitol is now Iraq's second-biggest buyer, behind ADNOC.
- Iraq lacks a large tanker fleet, complicating exports through the Strait of Hormuz.
- Iraqi exports from southern ports averaged 2.35 million barrels per day in August.
Vitol has purchased at least 25 million barrels of Iraqi crude for September loading, making the world's largest independent oil trader Iraq's second-biggest buyer behind ADNOC. Baghdad is offering steep discounts to keep its oil moving through the Strait of Hormuz, a route facing logistical challenges due to Iraq's lack of a large tanker fleet. Iraq's State Oil Marketing Organization (SOMO) offered September crude at discounts of $15 to $20.80 per barrel to its official selling prices, with some cargoes selling at even larger discounts, according to tender documents and trading sources. ADNOC has agreed to buy an additional 40 million barrels for September loading, following its purchase of 32 million barrels in August. These buyers possess the necessary logistics to move crude from inside the Strait of Hormuz for resale, unlike Iraq. Iraqi exports from southern ports averaged 2.35 million barrels per day in August and have risen to about 2.6 million bpd so far in September. Iran also began allowing some tankers carrying Iraqi crude through Hormuz in August. Iraq is also exploring alternative export routes, having begun trucking crude north toward Turkey's Ceyhan port, though this trial route has moved a significantly smaller volume compared to southern port exports.