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Iraq loses as Asia buys cheap Russian oil

PM:01:22:23/06/2022

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SULAIMANI— Iraq might end up as one of the "biggest losers" from cheap Russian oil as Asian countries lower their demand for Iraqi oil, according to a Bloomberg report published today.

Basra's heavy crude or medium crude has had no buyers in the current Asian trading cycle, while a tender to sell Basra's heavy oil did not fill, the report said.

This is because China and India, Iraq's main oil buyers, have flocked to buy cheaper Russian oil after the invasion of Ukraine.

Russian oil prices have dropped as Western countries imposed unprecedented sanctions on Moscow in response to its invasion of Ukraine and significantly reduced its imports of Russian oil and gas.

With the rise in oil prices, Iraqi oil revenues have hit records in recent months.

However, if the demand for Basra's medium and heavy crude decreases or if the price drops, Iraq would lose in a big way as the two products are the country's main exports.

Furthermore, oil traders have said that sellers of heavy oil have discussed discounting the price of their shipments compared to the official prices to attract buyers.

The report added that another part of the issue is related to the type of oil exported by Iraq.

Basra's heavy and medium tends to yield more of the less profitable fuel oil used in power stations and shipping. Refiners, however, are seeking and willing to pay more for oil that yields more products such as diesel and gasoline.

(NRT Digital Media)