India buys two million barrels of Iraqi oil at $28 discount per barrel

Storage tanks are seen at an Indian Oil refinery in Mumbai, India, on September 12, 2025. Photo: Indranil Aditya/NurPhoto via AFP Baghdad (IraqiNews.com) – Indian Oil Corp. (IOC), India’s largest state-owned refiner, has acquired 2 million barrels of Iraqi oil at a discount of almost $28 per barrel compared to the October Dubai benchmark. The acquisition includes Basrah medium and heavy crude oil grades. IOC contracted to receive the cargo from the international trading business Mercuria on a free-on-board (FOB) basis, according to Reuters. The crude is expected to be loaded and lifted between October 21 and October 31, 2026. The enormous $28 reduction is due to significant regional logistics challenges. Shipping disruptions in the Strait of Hormuz, which are associated with wider geopolitical tensions, have led to substantial increases in marine freight prices, insurance costs, and transit risks for buyers. To address these export restrictions and ensure that its oil remains attractive to major global consumers like India, significant price discounts have been introduced. These discounts aim to offset the heightened risks that refiners encounter when arranging their own transportation. This acquisition comes after IOC purchased one million barrels of October-loading Iraqi crude straight from Iraq’s State Oil Marketing Organization (SOMO) at a discount ranging between $23 and $28 per barrel only a few days ago.