Iraq is offering its term buyers huge discounts for crude loaded this month, but tankers will have to transit the Strait of Hormuz to collect the barrels deep inside the Persian Gulf just as hostilities flare in the region.

The OPEC producer is offering discounts to official prices of as much as $33.40 a barrel for its flagship Basrah Medium crude, according to a notice from state oil marketer SOMO seen by Bloomberg News. The document is dated May 3, and lists a range of pricing levels during different periods this month.

The Strait of Hormuz has been virtually impassable since the war started at the end of February, and an uptick in violence on Monday between the US and Iran has cast doubt over a four-week truce. Iraq was one of the first producers in the region to start cutting production early on in the conflict, as spare storage capacity rapidly filled with exports out of the Persian Gulf halted.

SOMO didn’t immediately respond to a request for comment.

Two vessels loaded oil at Iraq’s southern port of Basrah in April, down from 12 in March, as empty ships were unable to enter the Persian Gulf through Hormuz, according to ship-tracking data compiled by Bloomberg. As many as 80 tankers a month can usually load at the port. The country still exports crude via a pipeline through Turkey, but only at a fraction of shipped levels.

Should a buyer accept SOMO’s May terms, “force majeure shall not be applicable to this offer, given that it has been issued under existing exceptional conditions already known to all parties,” the notice shows. Basrah Medium loaded May 1-10 has a discount of $33.40 a barrel, which narrows to $26 over the rest of the month, while Basrah Heavy is being offered at $30 below official prices.

Separately, SOMO offered Qaiyarah crude via a spot tender last week, although the barrels also needed to be loaded deep within the Persian Gulf, according to traders.

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Published on May 5, 2026