Author：Wall Street CN

Iraq has issued delivery notices to Asian buyers, stating that its crude oil has been exempted by Iran and can transit through the Strait of Hormuz, but buyers are generally cautious and the scope of the exemption remains unclear.

The Iraqi National Oil Marketing Organization (SOMO) issued a notice on Sunday informing buyers that Iraqi oil shipments are now "exempt from any potential restrictions," requiring buyers to submit a delivery plan within 24 hours, including vessel information and requested loading volume, and emphasizing that all loading terminals, including Basra, are "operating normally."This marks the first sign of resumption of Iraqi crude oil exports after a de facto closure of the Strait of Hormuz for approximately one month.

However, according to Bloomberg, several Asian buyers said they are seeking further clarification, including whether the exemption applies to all Iraqi oil and whether Iraq will provide its own tankers to enhance transit security.

The lack of clarity regarding exemption details has cast doubt on buyer confidence.

Iran announced over the weekend that ships from neighboring Iraq were permitted to use the Strait of Hormuz, but an Iranian military spokesman did not specify which oil tankers or cargoes were protected. On Sunday, the tanker Ocean Thunder, carrying 1 million barrels of Iraqi crude oil, completed its transit through the strait, marking the first concrete case since the exemption arrangement took effect.

According to Bloomberg, Asian buyers are cautious about the arrangement, demanding clear exemption conditions, particularly regarding Iraq's willingness to provide its own tankers for transport, thus offering additional security for transit. Iraqi crude oil is typically sold on an FOB (Free On Board) basis, meaning the buyer arranges the transportation themselves and bears the transit risks.

Exports plummet, alternative channels are limited

The de facto closure of the Strait of Hormuz has severely impacted Iraq's oil exports. Data shows that Iraq's average daily crude oil exports plummeted by about 97% in March to approximately 99,000 barrels, a significant decrease compared to the previous month.

Iraq has very limited alternatives to bypassing the Strait of Hormuz; currently, only one pipeline system through Turkey is available, which is insufficient to handle large-scale export demand. This makes the Hormuz exemption arrangement crucial for the recovery of Iraqi exports.

According to Bloomberg, tanker traffic in the Strait of Hormuz has rebounded somewhat over the past week, with the seven-day rolling average reaching its highest level since the outbreak of hostilities as of last Saturday. However, overall traffic volume remains low compared to pre-war levels, and the market remains highly concerned about the sustainability of the strait's openness.