The latest

Adnoc’s trading arm has offered to move Basrah and other Iraqi crude through the Strait of Hormuz for Asian buyers, people familiar with the matter said. The proposal would extend the UAE state oil company’s shuttle system beyond its own exports as attacks on ships and intermittent diplomacy complicate Gulf oil flows. Adnoc declined to discuss commercial matters, while Iraq’s state oil marketer SOMO did not immediately respond to Bloomberg.

Details

• Shuttle method: The model uses tankers for short voyages through Hormuz before cargoes are typically transferred to other vessels outside the Gulf. Ships often switch off their transponders to avoid detection during those journeys. Adnoc and some other regional producers have used the approach to maintain exports.
• Asian outreach: Adnoc offered spot cargoes to Asian customers in recent days, according to the people, who requested anonymity because they were not authorised to speak publicly. Indian refiners were among the recipients. The report did not disclose proposed volumes, delivery schedules or prices.
• Export increase: SOMO chief Ali Nizar said Iraqi crude exports had recently climbed to about two million barrels a day in August. That exceeded the 1.5 million-to-1.7 million barrel range estimated by Iraq’s oil minister the previous week, although no direct link to Adnoc’s offers was confirmed.
• Deep discounts: SOMO has offered substantial discounts to companies willing to carry Iraqi oil through Hormuz. Prices for August-loading volumes were cut by as much as $30 a barrel against benchmarks, while flagship Basrah Medium was offered at discounts ranging from $25 to $27 a barrel.
• Transport capacity: Iraq has generally sold crude on a loading basis, leaving buyers or trading companies to arrange transport, Nizar told local television. Vitol and TotalEnergies have been leading carriers. Adnoc operates an expanded fleet and has also hired vessels from South Korea’s Sinokor Group.
• Regional pressure: Offers from traders other than Adnoc slowed in August as Gulf tensions intensified, the people said. Several Adnoc tankers were attacked while crossing Hormuz in the previous week. Despite those risks, shuttle shipments have helped sustain some Gulf exports and limit pressure on global prices.

Background

The United States and Iran have hardened their negotiating positions over reopening Hormuz, while continued strikes on vessels have made export planning difficult. Pakistan’s defence minister said the sides were nearing some form of arrangement, but the talks remained stop-start. Regional producers rarely rely on neighbouring countries to carry their energy exports.

What’s next

By the end of August, Iraqi export data will show whether shipments remain near two million barrels a day. Confirmation from Adnoc or SOMO of completed cargoes, and any US-Iran agreement on Hormuz access, are the next concrete indicators.