Iraq's State Oil Marketing Company (SOMO) announced on Sunday that it has raised the official selling price of Basra Medium crude to Asia for June by a premium of $4.30 per barrel above the Oman/Dubai average. This increase comes after the price of Basra crude in May was set at a premium of $17.30 per barrel.
Additionally, Basra Heavy crude was priced for Asia in the same month with an increase of $2.20 per barrel above the average Oman/Dubai prices, following a premium of $15.20 per barrel in May.
Details of the Announcement
Earlier, Iraq offered buyers of oil significant discounts on Basra crude loaded in May, especially for loading through the Strait of Hormuz, which has faced repeated closures since the onset of the conflict in Iran. As a member of OPEC, Iraq is offering Basra Medium crude at a discount of $33.40, equivalent to $26 per barrel compared to the official selling price for May, for loading in two periods: from May 1 to 10 and from May 11 to 31.
Moreover, Basra Heavy crude loaded in May was offered at a discount of $30 per barrel compared to the official selling price for May, according to a document issued by SOMO.
Background & Context
These discounts indicate the increasing pressures facing Iraqi crude oil exports, particularly with ongoing risks associated with shipping in the Strait of Hormuz, a vital artery for global oil flows. According to data from Kpler, the average Iraqi crude oil exports reached 3.33 million barrels per day in 2025, with most directed towards Asian markets.
In April, only two vessels were loaded at the Basra port, one of which crossed the Strait of Hormuz, while the other did not leave, reflecting the challenges facing the Iraqi oil sector.
Impact & Consequences
These developments underscore the importance of stable oil prices and their direct impact on the Iraqi economy. With rising prices, Iraq may face challenges in competing with other oil sources, which could affect its share in global markets. Continued pressures on oil exports may also lead to negative impacts on government revenues.
This price increase is seen as a strategic move aimed at boosting revenues amid the difficult economic conditions facing Iraq, particularly with the security and political challenges affecting the energy sector.
Regional Significance
This increase in oil prices comes at a sensitive time for the region, where many Arab countries are affected by global oil prices. Amid multiple economic crises, rising prices may improve revenues in some countries, while others may face challenges in managing their budgets.
In conclusion, these developments reflect the significance of the oil sector in the Iraqi economy, highlighting the challenges and opportunities the country faces amid changing regional and international conditions.