Iraq’s state oil marketer SOMO is now allowing buyers of Basrah Medium and Heavy crude to take delivery via ship-to-ship transfers near the Omani coast, offering a way to avoid the Strait of Hormuz entirely. Before the war began in February 2026, Iraqi oil exports stood at 3.3 million barrels per day, before collapsing to roughly 100,000 barrels per day in May, a 97 percent drop. By August, exports had recovered to around 2 million barrels per day, with discounts still ranging from $25 to $29.80 per barrel. This new STS option is SOMO’s attempt to close the remaining gap and reduce the risk premium buyers had been demanding. Oil traders and major companies including Vitol, TotalEnergies and ADNOC could regain access to a market that had been largely closed for several months.
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