Iraq’s State Organization for Marketing of Oil (SOMO) confirmed on Friday that the signing of memorandums of understanding with the Sultanate of Oman reflects the strategic importance of Oman in marketing Iraqi oil. Discussions are underway regarding the construction of a full-scale pipeline from Basra to Oman.

SOMO Director General Ali Nizar Al-Shatari stated, according to the official news agency, that “the signing of memorandums with Oman is due to its strategic location for Iraqi crude and petroleum products. Oman has access to both the Arabian Sea and the early part of the Arabian Gulf, before the Strait of Hormuz. This makes it closer to our crude oil customers, especially in Asia, allowing them to load oil from those locations instead of taking the longer route.”

He added, “There are also technical considerations—open waters reduce the impact of bad weather. Our ports in Basra suffer from harsh weather conditions, which force us to halt exports. Therefore, exporting through Oman offers a more open and stable route, ensuring reliability for our customers and reducing the risk of disruptions.”

Al-Shatari noted that “the discussion is open regarding the construction of a full pipeline from Basra to Oman. This would diversify export outlets and increase export capacity, giving Iraq the ability to raise quotas and production ceilings, as referenced by the Prime Minister in his remarks on boosting investments in refining. Export capacity depends on available export outlets.”

He continued, “Oman will play a major role in this effort if the pipeline and storage facilities—outlined in the memorandums—are completed. The commercial process also involves marketing aspects. When oil is stored in Oman, costs are incurred, and these must be recovered. Iraq needs additional profits to recoup these costs, which can only be achieved through commercial integration.”

Al-Shatari concluded, “For this reason, another memorandum was signed for commercial integration between Iraq and Oman, involving SOMO and OQ Trading, a government-owned Omani company with a strong international reputation. We are currently discussing contract details, as the memorandums provide a general roadmap, but we need to finalize the contracts to move forward.”