Appetite for Iraqi oil grows as buyers shun Russia

Appetite for Iraqi oil grows as buyers shun Russia

London, 3 March (Argus) — Iraq's state-owned oil marketer Somo has received requests for additional crude supply as buyers seek alternatives to Russian volumes, according to a senior Iraqi official.

Some of the extra demand has come from buyers in Europe, China and India, the source said, adding that Iraq's limited crude export capacity would make it difficult to honour the requests. Somo-marketed crude exports rose by 3pc on the month to 3.32mn b/d in February, according to preliminary oil ministry data.

Some European buyers have shied away from buying Russian crude in recent days amid biting sanctions on Moscow over its invasion of Ukraine. Although sanctions are not targeting Russian oil directly, measures taken against Russian banks have created uncertainty about financing of trade. This, together with rising transportation costs in the Black Sea, has eroded demand for Russian crude.

Since the invasion, Russian producer Surgutneftegaz has repeatedly failed to award Urals cargoes in its typically well-attended sell tenders. The caution over taking Russian crude extends beyond European buyers. In a move to shelter itself from rising insurance and shipping costs, Indian refiner IOC added a note in its latest tenders saying it will only accept offers for crude loaded from Russian