TotalEnergies Offers Millions of Iraqi Barrels to Asia
French oil major TotalEnergies SE is offering millions of barrels of Iraqi crude that can be promptly delivered to Asia, according to traders, adding to a market already brimming with supply.
The offers by TotalEnergies should help accelerate oil exports from Iraq, which has lagged behind other Persian Gulf producers in getting its barrels to market after shipping through the Strait of Hormuz improved. Basrah Medium and Basrah Heavy is being marketed to refiners, said traders who received the offers, asking not to be identified as the information isn't public.
Iraq's state oil marketer, SOMO, had been trying to sell crude in the spot market at deeply discounted prices, although cargoes were only available on a loading basis. That meant buyers had to organize vessels to transit through Hormuz and sail deep into the gulf to collect the barrels. By comparison, TotalEnergies is now offering to collect and deliver these shipments to customers across Asia from South Korea, Taiwan, and China, traders said.
TotalEnergies and SOMO didn't immediately respond to requests for comment.
Oil flows through Hormuz have picked up after an interim peace deal between the US and Iran, giving refiners in Asia more than enough options to meet their supply needs. That's forced Saudi Arabia and the United Arab Emirates to offer more flexible terms to revive sales, and led to falling crude prices.
Asian refiners outside of China received offers for Basrah Medium at a premium of more than $1 a barrel to the Dubai benchmark, while Chinese processors got offers at several dollars below ICE Brent, the preferred benchmark for buyers in the country, traders added. These levels, made on a delivered basis, would represent prices after factoring in freight and other logistics costs.
TotalEnergies has been seeking supertankers that have the capacity to transport two million barrels of crude, traders said. Shipments can be for arrival in July and August, or the coming months, although the total volume being offered in this tranche is unclear, they added.
Last month, trading house Vitol Group offered Iraqi crude to customers, which was rare at the time because of a blockade of Hormuz and heightened concerns about the safety of ships and their crews. The offer indicated that some vessels made it out of the gulf, most likely after turning off transponders.
What do you think? We’d love to hear from you, join the conversation on the
Rigzone Energy Network.
The Rigzone Energy Network is a new social experience created for you and all energy professionals to Speak Up about our industry, share knowledge, connect with peers and industry insiders and engage in a professional community that will empower your career in energy.