Azernews.Az

Ulviyya Poladova

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Iraq has begun offering major discounts on its crude oil exports for May deliveries as tensions continue to rise in the Persian Gulf region, AzerNEWS reports.

According to a notice issued by Iraq’s state oil marketer SOMO and seen by Bloomberg, the country is offering discounts of up to $33.40 per barrel on its flagship Basrah Medium crude. The document, dated May 3, outlines different pricing levels for cargoes loaded during various periods throughout the month.

The move comes at a sensitive time for the global oil trade, as tankers transporting Iraqi crude must pass through the strategically vital Strait of Hormuz - one of the world’s most important maritime energy routes.

Iraq previously slashed oil production due to overflowing storage facilities and problems with exports through the Strait of Hormuz caused by the conflict surrounding Iran. Some supplies continue to be shipped via pipeline through Türkiye, but their volumes remain significantly lower than seaborne shipments.

The Strait of Hormuz is a narrow maritime passage between the Persian Gulf and the Gulf of Oman, holding significant strategic importance as approximately 20% of global oil supplies and around 25% of liquefied natural gas (LNG) exports pass through it. Essentially, it serves as an energy artery for countries in Asia, Europe, and even the United States.

The strait separates Iran from Oman, and in some areas, the width of the shipping channel is only two miles on each side. Given its critical role in global energy supply chains, ensuring the safety and security of this vital waterway is paramount for international trade and economic stability.