Iraq approves three-month oil export contracts with 30% discount from September 1

The Iraqi government approved new mechanisms on Wednesday, 19 August, to contract international and local companies for the export of crude oil starting from 1 September. The decision, aimed at expanding the country’s energy logistics, includes short-term contracts valid for three months. During a session chaired by Prime Minister Ali Faleh Al-Zaidi, the Council of Ministers sanctioned recommendations to sell crude oil at specific rates. According to the cabinet directive, the purchase price will be set at either the rate determined by the State Organisation for Marketing of Oil (SOMO) or the price stipulated in the federal budget—whichever is lower. A 30% discount, to be reviewed annually, will also be applied to these transactions starting next month. Expanded transport and import powers The Council further granted exceptional approvals to increase Iraq’s total export and import capacities. The Minister of Oil now holds the authority to establish additional transportation routes for existing contracts and to renew current agreements. The move is designed to diversify the outlets through which Iraqi crude reaches global markets. Beyond exports, the Minister has been authorized to approve the import of petroleum products when necessary. The government stated this measure is intended to ensure stable domestic supplies and prevent fuel shortages or energy crises within the country. Impact on regional energy markets This policy update is significant for regional energy traders…