New Prices for Iraqi Oil, but Basra Heavy ‘Delayed’

By John Lee.

Iraq’s State Oil Marketing Organisation (SOMO) has adjusted its official selling prices for its Basra and Kirkuk crude oil for May.

It has also issued separate prices for its new Basra Heavy grade, giving a significant discount to the more desireable Basra Light, but Reuters cites industry sources as saying that shipments of the new grade are likely to be delayed until June.

Platts reports that traders have still not been given detailed information about the quality of the new grade, specifically its density, sulfur content and product yield.

In common with some other countries, Iraq’s oil is priced relative to regional benchmark prices:

  • For shipments to US, contracts are priced are relative to the Argus Sour Crude Index (ASCI);
  • Shipments to Europe are priced relative to the North Sea Spot BFOE (Brent benchmark); and
  • Asian shipmentas are priced relative to the Dubai-Oman crude benchmark, published by Platts, the energy-information division of McGraw-Hill.

The new prices to Europe are as follows:

  • Basra Light to Europe will sell at a discount of $5.00 a barrel to Dated Brent, up from a discount of $5.20 last month.
  • Basra Heavy to Europe will sell at a discount of $8.45 a barrel to Dated Brent.
  • Kirkuk Crude to Europe will sell at a discount of $4.70 a barrel to Dated Brent, compared to a discount of $4.80 previously.

And to the US:

  • Basrah Light will sell at a discount of $0.15 to the U.S. benchmark, a reduction on last month.
  • Basrah Heavy will sell at a discount of $1.40 to the U.S. benchmark.
  • Kirkuk will sell at a premium of $0.85, up from last month.

To Asia:

  • Basrah Light to Asia will sell at a discount of $2.80 to the benchmark, unchanged from last month.
  • Basrah Heavy to Asia will sell at a discount of $6.85 to the benchmark.

(Sources: Bloomberg, Reuters, Platts)

(Oil image via Shutterstock)

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