Eco
Iraq's State Oil Marketing Organization (SOMO) has announced a tender for fuel oil shipments for September loading, but commercial sources anticipate limited buyer participation due to ongoing security risks to shipping in the Strait of Hormuz. According to commercial sources and the tender document, SOMO is offering high-sulfur fuel oil, a direct distillation product, available for loading during the first week of next month. The document clarifies that Iraqi-origin fuel oil can be shipped via ship-to-ship transfer using floating storage at two designated loading points. One loading point is located within Iraqi territorial waters near the Khor Al Zubair terminal, while the other is in Omani waters near the Sohar terminal, outside the Strait of Hormuz. Buyers have the option to load from either or both points, with a total of 420,000 tonnes offered, and varying quantities available in each floating storage unit. The deadline for submitting bids is August 24. SOMO shifted its strategy to offer fuel oil for monthly delivery instead of its usual long-term tenders following a brief lull in tensions between the United States and Iran last June. Commercial sources indicate that the company continues to issue these tenders despite the Strait of Hormuz still facing significant navigation challenges after recent renewed tensions. Oil companies typically refrain from commenting on commercial dealings and tenders. Nevertheless, potential buyers have shown limited interest due to the persistent shipping risks in the region. In this context, one trader stated that participation might be "minimal or non-existent, as no one wants to operate their vessels in an active conflict zone." Shipping traffic through the Strait of Hormuz, a vital waterway in the Gulf and a key artery for Iraqi oil and fuel exports, remains largely halted in recent days amid a stalemate in talks aimed at de-escalating regional tensions. Another trader noted that "demurrage fees are insane," explaining that these penalties are imposed on shipping companies or recipients if shipments or containers remain in port or at the terminal longer than the agreed loading period. According to industry data, Iraq's total fuel oil exports amounted to approximately 171,000 tonnes in July, a slight increase from 156,000 tonnes in June. It is worth noting that Iraq's average monthly fuel oil exports typically exceeded 1.2 million tonnes before the escalation of tensions in the region.
