Iraq is offering an additional $25 to $29 per barrel to shipping companies willing to load crude from its Persian Gulf ports, according to a Bloomberg analysis by commentator Javier Blas. A single VLCC supertanker shipment could yield $50 to $58 million in profit after costs, reflecting the security risks in the region.
Iraq is paying a significant premium to secure shipping capacity for crude exports from its Persian Gulf terminals, according to a Bloomberg report published Monday. The analysis by Javier Blas estimates that Iraq is offering $25 to $29 per barrel above market rates to encourage shipping companies to accept the security risks of loading at Iraqi ports. A single very large crude carrier (VLCC) could earn $50 to $58 million in profit after costs.
The premium reflects the broader disruption in the Persian Gulf and Strait of Hormuz, where shipping activity has been severely curtailed. As The Zioneer has reported, traffic through the Strait of Hormuz nearly halted in recent weeks, and Iran has begun charging vessels up to $2 million for passage. Oil prices have fluctuated between $81 and $88 per barrel amid the tensions.
The Bloomberg report does not specify how long the premium has been in effect or whether other Gulf producers are offering similar incentives. The long-term viability of Iraq's export route via the Persian Gulf remains uncertain given the ongoing security environment.
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