China, India Eye Discounted Iraqi Oil Amid Hormuz Security Concerns

Several oil refineries in China and India are looking for tankers to transport Iraqi crude oil through the Strait of Hormuz, attracted by a major price discount. However, security concerns in the strategic waterway have prevented them from finalizing any shipping arrangements so far.

According to multiple sources in the shipping industry cited by Reuters, several Chinese and Indian refineries have been searching this week for vessels capable of carrying crude oil from Iraq’s Basra Oil Terminal through the Strait of Hormuz.

The main attraction is a significant discount offered on Iraqi crude. Sources said Iraq’s state oil marketing company SOMO is offering discounts of up to around $30 per barrel on Basra Heavy and Basra Medium crude grades for August deliveries.

The discounted prices have encouraged some refineries in China and India to show interest in purchasing Iraqi oil.

However, shipowners remain reluctant to send vessels through the Strait of Hormuz due to security risks in the region. As a result, no tanker charter agreements have been finalized yet.

Data from energy market research firm Kpler showed that only six crude oil tankers exited through the Strait of Hormuz this week. During the same period, 21 vessels entered the waterway, most of which used Iranian-controlled waters.

The Strait of Hormuz, one of the world’s most important energy routes, was closed by Iran following the outbreak of the US-Israel war on February 28. Before the closure, an average of 130 to 140 vessels passed through the strategic waterway every day.

The uncertain security situation in the Strait of Hormuz continues to raise concerns over global energy supplies and international oil markets.