Iraq Adjusts Oil Pricing, and Adopts the ASCI Benchmark

loomberg reports that Iraq raised the official selling prices for crude delivered to the U.S. and lowered them for Europe.

The March price for Basra Light oil for delivery to the U.S. rose by 80 cents, to a discount of $4.35 below West Texas Intermediate crude, according to a statement from Iraq's Oil Ministry. The price for Europe declined by 20 cents to a $1.70 discount to Dated Brent, while the Asia price fell to a 45-cent discount to the average of Oman and Dubai oil prices.

The price of Kirkuk crude to the U.S. increased by 40 cents to 75 cents below WTI, and dropped by the same amount for Europe to a discount of 90 cents below Dated Brent, the ministry said.

Meanwhile, Reuters reports that the benchmark for pricing sales to the US will change in April to the Argus Sour Crude Index (ASCI).  According to Falah Alamri, head of Iraq’s State Oil Marketing Organization (SOMO), “Switching to Argus was the best solution for us to ensure stable prices and also to satisfy our customers.”

The ASCI better represents the type of oil exported from the country. (Both the UAE and Qatar publish an outright price for their crude, rather than a differential, and do not publish different prices for different destinations).

Iraqi crude oil production rose 14 percent in January from a year earlier, averaging 2.46 million barrels a day, according to the U.S. State Department.

(Sources: Bloomberg, Reuters)

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