Why is Iraq struggling to sell its Basrah crude oil this month?

Iraq is struggling to sell its Basrah crude because its state oil-marketing company SOMO sharply reduced discounts—cutting them by $9–$10 per barrel for Basrah Medium and Heavy crudes loading in September compared to August—making the barrels unattractive to traders amid persistently high shipping costs and heightened navigation risks in the Strait of Hormuz, especially following recent attacks like the one that killed two seafarers on a Saudi tanker.

What trade-off is Iraq facing between pricing and export viability?

Iraq faces a critical trade-off: it needs higher prices to bolster strained state finances amid the Iran war’s economic pressure, but setting prices too high—by slashing discounts to $15–$18 below benchmark instead of $25–$27—undermines buyer interest, as traders say the offers leave no room to absorb elevated transportation costs and security risks associated with transiting the Strait of Hormuz.

Iraq Struggles to Sell Oil From Basra After Hiking Prices

Sep 7, 2026

Iraq's state oil marketer SOMO struggles to sell Basra crude after cutting discounts, as high shipping costs and Strait of Hormuz risks deter traders. Buyers remain hesitant despite Baghdad's revenue needs, highlighting regional supply chain friction.

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Iraq Struggles to Sell Oil From Basra After Hiking Prices

Iraq Struggles to Sell Oil From Basra After Hiking Prices

FAQ