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Iraq Oil Flows Defy Blockade, Fueling China
21 Aug
Summary
- Chinese refiners bought 8 million barrels of Iraqi crude.
- Iraq exports 2 million barrels daily via Strait of Hormuz.
- Saudi oil exports rerouted due to Yemeni Houthi attacks.
Chinese refiners are bolstering their supply with significant purchases of Iraqi crude, including 8 million barrels of Basrah Heavy and Basrah Medium for prompt delivery. This strategic acquisition aims to mitigate the impact of transit disruptions affecting major oil export channels.
Despite challenges, including a partial blockade of the Strait of Hormuz and evasive tactics by some vessels, Iraq has maintained a steady export rate. The country is reportedly shipping 2 million barrels of crude daily.
Concurrently, Saudi Arabia faces its own logistical hurdles. Attacks by Yemeni Houthis have forced the redirection of Saudi oil exports, shifting them from the Strait of Hormuz to the Red Sea and subsequently via the Suez Canal to Egypt, impacting delivery timelines to Asia.
These developments highlight the volatile nature of global energy transit. The Iraqi crude purchases are expected to help Chinese refiners compensate for delayed Saudi Arabian shipments and also supplement recent acquisitions of Emirati crude.
Chinese majors, including Sinopec, PetroChina, and Sinochem, previously bought around 2 million barrels of Upper Zakum crude in a late July tender, signaling continued demand for Middle Eastern oil sources.
