Iraq's state owned oil marketer SOMO are closing in on a deal with China's Zhenhua Oil in order to boost crude oil sales. With China the worlds largest importer, and the state run Zhenhua already marketing SOMO oil since early 2018, the new venture agreement could help replace US or Iranian oil imports.
The agreement will also help bolster Iraq's position in Asia, the largest and fastest growing region for oil consumption globally. Asian markets currently import around 3.8 million barrels per day from Iraq, which equates to roughly 60% of the country's oil exports.
According to Reuters, sources believe the deal in pending regulatory approvals, with a deal to be potentially finalised by November this year. Singapore or Tianjin were also suggested to be two potential locations for the joint venture.
Zhenhua began marketing Iraq's Basra light crude in early 2018 and has also entered a deal to develop an oilfield in East Baghdad.