Adnoc Offers to Shuttle Iraqi Oil Through Hormuz Strait

The Abu Dhabi National Oil Company (Adnoc) is offering to shuttle Iraqi oil exports, including Basrah crude, through the Strait of Hormuz to Asian refiners. To mitigate risks from the ongoing war with Iran and frequent ship strikes, Adnoc employs shuttling tactics that involve short trips and the disabling of transponders to avoid detection before transferring cargoes to other vessels outside the gulf.

Iraq's State Organization for Marketing of Oil (SOMO) has attempted to incentivize transit through the strait by offering deep discounts of up to $30 per barrel below benchmark prices. These measures have coincided with a rise in export volumes; Ali Nizar of SOMO reported that Iraqi crude exports recently increased to approximately 2 million barrels per day, up from previous estimates of 1.5 million to 1.7 million barrels per day.

Diplomatic efforts to stabilize the region remain mixed. While the United States and Iran have hardened their positions in negotiations to reopen the strait, Pakistan's defense minister indicated that the two parties are close to reaching an arrangement.