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Iraq

A new joint venture between Iraq and its Arab partners will allow coordinated transport, storage and trade of crude oil and refined products around the world, according to a new report by Reuters.

The move comes as Iraq becomes increasingly active in developing new channels for the sale of its oil produce since the country regained its position as the second-largest OPEC producer.

"The new venture will have exclusive rights for transportation of crude and refined products. It will develop other projects include trading starting with fuel oil and products and can eventually get into crude oil allocations," an industry source close to the matter told the news agency.

The company, Al-Iraqia Shipping Services and Oil Trading (AISSOT), will engage in a "plethora of activities ranging from trading of petroleum products, ship chartering, oil terminals, various marine services, and bunkering,” the company statement says.

Iraqi Oil Tankers Co. struck a deal to own 22.5 percent stake in the venture, with the Arab Maritime Petroleum Transport Co. holding the remaining shares.

"Formation of AISSOT is based on Iraqi Oil Ministry vision to further strengthen activities of two major entities i.e. AMPTC and IOTC in the field of shipping, marine services, and oil trading," AISSOT said in a statement. "It is also one of Iraqi Oil Ministry’s initiatives to develop national oil companies to international levels."

The Organization of Arab Petroleum Exporting Countries founded AMPTC back in 1973. Saudi Arabia holds the largest stake, 15.595 percent, with the group’s smaller members holding shares commensurate with their national output and initial financial contribution to the company.

Related: Oil Tycoon Pushes For Venezuela Sanctions

Iraq has been active in developing new channels for the sale of their oil goods since the country regained its position as the second-largest producer in OPEC.

Top Iraqi oil marketer Falah Al Amri suggested in May that Iraq is in the beginning stages of creating an oil price hedging program that would lock in prices for future trades well in advance—just like Mexico’s existing strategy, but almost twice as large in size.

By Zainab Calcuttawala for Oilprice.com

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