Special focus this week: Iraqi raw exports & dirty oil flow
IAt the end of July 2025, the United States announced a 25 percent tariff on Indian exports, explicitly quoting India’s sustainable purchases for Russian crude oil equipment and military. This step is widely interpreted as part of the country’s largest strategy targeting countries that maintain strong commercial relations with Moscow.
On August 6, the follow-up executive order imposed an additional 25 percent tariff on Indian goods, scheduled to take effect 21 days later. If implemented according to plan, this will increase India’s total tariff exposure to 50 percent, one of the highest faced by any US trading partner. Indian officials have condemned the action as discriminatory, noting that other major importers of Russian oil have not been subject to equal sentences by the United States. It is important to highlight that the latest actions reflect a broader US effort, including the proposed secondary sanctions and a potential tariff of up to 500%, which is targeted for countries that import Russian energy, especially China and India.
Iraqi position in the demand for Asian crude oil
Inside the Arab Gulf, Iraq ranks as the third largest supplier of crude oil, holding 19.0% of shares behind Saudi Arabia and UAE. From the perspective of Iraq, China and India are the two most critical markets: China contributed 48% of Iraq’s dirty raw exports, while India followed with 38.4%, according to the tanker tracking data in July 2025. Indian demand superiority reflects the position of Iraq as a stable supplier of medium acidic values, suitable for the Indian refinement configuration. The purchase of Indian crude oil is mainly influenced by price and quality; However, Iraq was established to get if there were changes in market sentiment or tighter policy regarding Russian oil exports.
Iraq’s southern export infrastructure is very centered: 97.5% of its raw volume departs through the Port of Basrah, and 94% comes from the Al Basrah oil terminal. The raw contributed 97.9% of the total Iraqi dirty cargo exports, and the very large rough operator (VLCC) handled 88.3% of all shipments. CEZI Dao China Terminal (10.8%) is currently the main destination for Basrah-Origin crude oil, followed by the main refineries of India in Reliance Jamnagar SPM (8.8%), Paradip (6.2%), and Vadinar (5.2%).
Iraq accelerates upstream expansion: July adds to the surge in medium -term exports
Iraq has intensified the upstream development encouragement in 2025, targeting medium -term production capacity of 6 million barrels per day in 2028 to 2029. This effort is supported by accelerated well activities and field modernization, in addition to the agreement of new licenses with international and Chinese partners. According to an official figure from the Iraqi drilling company, 113 oil wells were completed in the first half of 2025, including 27 newly drilled and 86 wells rehabilitated, throughout the southern and northern regions.
The development of the field level remains concentrated in the South Supergiant Assets of Iraq, with an active expansion program in West Qurna 1, Zubair, Rumila, Majnoon, Faihaa, and Ratawi. In particular, West Qurna 1, which was operated by Petrochina, was projected to reach 750,000 barrels per day by the end of 2025, while Halliburton led the rebuilding of Nahr Bin Omar, who targeted an increase from 50,000 to 300,000 barrels per day. In parallel, Iraq has completed a rebuilding plan for the Kirkuk oil cluster in collaboration with BP, which aims to restore the capacity of the northern field.
This initiative is designed to support long -term production growth, but the increase in actual output remains subject to the schedule of project executions, infrastructure bottlenecks, and the ability to capture gas and the ability of water injection. Iraqi infrastructure modernization includes an increase in pumping systems, increasing energy supply, and increasing capacity in the main terminal.
However, in the short term, the volume of Iraq’s raw exports is limited by OPEC Plus Disciplinary Quota. Although the technical capacity is higher, May Iraq and June 2025 exports on average around 3.2 million barrels per day, down from the previous level of 3.4 million barrels per day.
OPEC Plus’s latest decision, which was made in July 2025, confirmed the release of voluntary cutting gradually starting October 2025, including the Iraqi section of Rollback. Iraq’s official production targets will increase gradually in the fourth quarter of 2025, offering space to increase simple exports if the project ramp-up remains according to schedule. However, the government has reiterated its commitment to avoid quota violations because it navigating the expansion of capacity and market balance.
In early 2025, Iraq completed the improvement of the main infrastructure in the Al Basrah Oil Terminal (ABOT), the main export hub, by installing the pumping unit and a new high -capacity measurement system. This increase significantly increases operational efficiency, loading speed, and flow control for VLCC shipping. As a result, Abot’s effective export capacity now exceeds 3.3 million barrels per day, creating a technical head space for future output growth. Additional investments in the terminal system and pipe integration are ongoing, positioning the southern export infrastructure of Iraq to support the volume that is expanded due to OPEC Plus ease restrictions. Even so, the actual export flow remains in harmony with quota compliance.
The July flow data confirmed the gradual export rebound
Iraq’s crude oil exports from the Arab Bay have shown a fluctuating trend over the past year. After a solid beginning in the early months, the volume subsided until March and April before experiencing a sharper decline in May. Juni marked the lowest point so far, but the flow began to recover in July. This recovery shows the potential shift in market dynamics, may be supported by stronger demand from Asian buyers, especially as refineries in China and India usually increases the intake of crude oil in the third quarter because of seasonal restarts and cold pre-season.
Rebound also coincides with the increasing regional volatility period. In mid-July 2025, a series of drone attacks hit oil fields in the Iraqi Semi-autonomous Kurdistan region, disrupting operations and increasing geopolitical tension throughout North Iraq and neighboring areas. While the impact of direct supply is geographically contained, the market sensitivity that is strengthened by riots of northern instability and, on the contrary, may have strengthened the strategic attraction of the southern export of Iraq through the Arab Gulf.
In July 2025, Iran decreased its official selling price (OSP) for the main crude oil value marketed for Asian refiners, marking a shift from the previous month level. Iran Light Crude is valued at $ 1.50 per barrel above Oman/Dubai benchmark, down from $ 1.80 in June, showing a clear premium reduction. Forozan Blend also experienced a marginal price adjustment, slipping from the $ 0.10 premium in June to $ 0.05 above the benchmark in July. Iran Heavy raw seeing its discount a little deeper, moving from $ 0.15 below the average Oman/Dubai in June to $ 0.20 below in July.
Adjustment of the month to this month in July reflects relative softening in Iranian prices in all classes. While the direct impact on market share is not documented publicly, such price determination behavior can strengthen Iran’s competitiveness among Asian lectures that are sensitive to prices, especially when the increase in geopolitical uncertainty in the neighboring rough -producing regions.
Looking ahead
With the flow of Russian crude oil under pressure, Iraq utilizes strong export infrastructure and medium values that are compatible with refineries to win market share in Asia. Independent Chinese companies, such as Geo -Jade, United Energy Group, Zhongman, and Anton, make parts in the upstream Iraq sector, which aims to double their output to 500,000 BPD in 2030. While Chinese refiners strengthen their long -term raw supply in Iraq, Indian refiners navigate short -term disorders. US sanctions and tariff threats have forced the Indian state rectors to pause Russian crude oil, encouraging them to switch to alternative suppliers. Indian Oil Corporation (IOC) baru -baru ini memesan campuran pengganti: satu VLCC dari WTI minyak mentah dari Mercuria, tiga Suezmaxes dari WTI dari Phillips 66, Equinor, dan Vitol, satu VLCC dari campuran DAS dari Trafigura, dan satu Suezmax dari Western Pilih (WCS) dari WC) dari WC) dari WC). Apart from this diverse response, Iraq’s values remain the long-term substitute for the preferred, given its compatibility with the existing Indian and logistical purification system.
Source: signal
