State marketer SOMO offered term buyers up to $33.40 a barrel off official prices for cargoes loaded this month and collected via the Strait of Hormuz.
The May 3 notice set different pricing levels for separate periods in May, as tankers face heightened risks from hostilities flaring around the Gulf.
The move signals Iraq is using steep price incentives to keep exports moving from deep inside the Persian Gulf despite security concerns on a key global oil shipping route.
Is a $33 discount on Iraqi oil worth navigating a waterway of drones, mines, and missiles?
With the Strait of Hormuz paralyzed, is a global recession and food security crisis now inevitable?
Can President Trump's 'Project Freedom' truly secure the world's most dangerous chokepoint from Iranian attack?