By John Lee.
Iraq is reported to be giving bigger discounts for heavy crude from Basra from January.
The State Oil Marketing Organization (SOMO) recently abandoned plans to split its “Basra Light” grade into two grades, light and heavy.
Reuters says this latest move is aimed at pacifying buyers who have had to deal with varying quality of blended Basra Light, which can vary from an API gravity of 26 degrees to 34 degrees.
It is believed that from the end of the year, a discount, or “de-escalation factor”, of 60 cents a barrel will be applied for every API degree below 27; a de-escalation factor of 40 cents per API is already in place for Basra crude with an API below 34 degrees.