Iraq says its tanker firm shipped crude through Hormuz

Iraq's state-owned Oil Tanker Company said Saturday that it carried 2 million barrels of Iraqi crude through the Strait of Hormuz on a very large crude carrier (VLCC). Its director general called it the company's first such operation in decades. The shipment comes as attacks on tankers continue in the waterway, and as Gulf producers look for more control over how their oil leaves the region.reuters+3

A shift in how Iraq sells its oil

Director General Ali Qais told the Iraqi News Agency that the company had been asked to carry Iraqi crude beyond the strait for the first time in decades. That moves part of the sales process away from handing cargoes to buyers at the Port of Basra, according to Syria's state news agency SANA, which cited the Iraqi report. Qais said the company had talked with several specialized firms before securing the tanker, which loaded 2 million barrels. He said the arrangement would give the State Organization for Marketing of Oil (SOMO) more flexibility in selling and pricing crude.sana

Qais also said the company had been told to look into buying and owning its own crude tankers as soon as possible, so it can compete with similar companies in the region. Bloomberg reported in September that the Iraqi Oil Tankers Co. had opened a tender to hire at least two VLCCs for 180 days to move the country's oil through Hormuz. Bloomberg described the tender as part of a wider effort by regional producers to take more control of exports through the chokepoint.bloomberg+1

A contested waterway

Iraq did not say when the tanker made the transit or what route it took. Shipping through Hormuz has been badly disrupted since the United States and Israel began strikes on Iran in late February. Iranian attacks sharply reduced traffic, and Iran has at times charged fees or let only ships from certain countries pass, according to the Congressional Research Service. A preliminary US-Iran agreement in June reopened the strait, but traffic stayed well below normal. The Islamic Revolutionary Guard Corps has insisted that vessels use routes Tehran chooses.aljazeera+1

Violence has picked up again in recent days. Seatrade Maritime reported that a tanker caught fire after an attack on Oct. 1, following strikes on four tankers over 24 hours on Sept. 28 and 29. In September, Reuters reported that daily transits had dropped to single digits, with seven vessels on one day against a 10-day average of 15.reuters+1

Iraqi cargoes have made the trip before on chartered ships. In May, two VLCCs, each carrying 2 million barrels of Iraqi crude, left the strait with their trackers switched off to avoid Iranian attacks, Reuters reported, citing Kpler and LSEG data. This week's voyage is different because Iraq's state tanker company is now running the shipment itself.reuters