TotalEnergies is offering millions of barrels of Iraq’s Basrah Medium and Basrah Heavy crudes for prompt delivery to Asia this month and next, traders who had received some of these offers told Bloomberg on Friday.
Iraq, one of the Persian Gulf producers most hit by the closure of the Strait of Hormuz, has been offering crude on the spot market with deep discounts and only on a loading basis, which means buyers need to secure empty tankers to move inbound into the Gulf via the Strait of Hormuz.
But TotalEnergies, one of the top commodity traders among Big Oil, is offering to buyers in China, South Korea, and Taiwan unspecified volumes the Iraqi crude which the supermajor would load from Basrah and have delivered through the Strait in the coming weeks, according to Bloomberg’s sources.
As a result, TotalEnergies has been looking to hire very large crude carriers (VLCCs), the supertankers capable of carrying up to 2 million barrels of crude oil, the trading sources told Bloomberg.
The offers from TotalEnergies suggest that the supermajor is fairly optimistic that shipping conditions through the Strait of Hormuz will continue to improve in the coming weeks and months.
Iraq, which is OPEC’s second-largest producer after Saudi Arabia, has seen the worst of the Middle East crisis as its heavily oil-dependent economy was collapsing with the trickling oil revenues amid the blockage of the Strait of Hormuz.
The reopening of the Strait of Hormuz and the chance to push barrels out of the Gulf through TotalEnergies could kickstart Iraq’s oil sales and revenues. These were severely crippled over the past months with only a pipeline through Kurdistan exporting Iraqi crude from the northern fields to the Turkish Mediterranean port of Ceyhan.
Expectations of surging spot supply from Iraq, and from the other Gulf producers rushing to ship barrels through Hormuz, have depressed oil prices and prompted investment banks to slash their oil price forecasts for the rest of the year and for 2027 as the market balance is once again forecast to tip into a glut.
By Michael Kern for Oilprice.com
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