Iraqi crude recorded larger discounts for shipments scheduled in October, as traders and a document revealed that the Iraqi state oil marketing company (SOMO) offered greater discounts to buyers under short-term contracts to encourage them to take delivery of the oil scheduled for loading in October.
The document showed that SOMO offered discounts of $34.50 and $37 per barrel for Basrah Light and Heavy crude on a free-on-board basis from the Basrah oil terminal or the Iraq Single Point Mooring loading facilities.
The discounts, which are being determined based on benchmark price indicators in the relevant destination markets, widened compared to discounts of less than $30 per barrel for oil scheduled to be loaded in August and September, amid rising shipping costs and ongoing risks associated with receiving shipments in the Strait of Hormuz.
Discounted Basrah crude attracted buyers such as Vitol and Abu Dhabi National Oil Company (ADNOC) in recent months, helping Iraq increase its exports.