Iraq's State Oil Marketing Organisation (SOMO) has cut the official selling price for September shipments of its Basra Light crude to Asia, reducing the cost to its lowest level in eighteen months, while raising its price to the US.
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 the North Sea Spot BFOE; and
- Asian shipmentas are priced relative to the Dubai-Oman crude benchmark, published by Platts, the energy-information division of McGraw-Hill.
Basra Light Crude is now priced at:
- For US, a discount of $1.30 relative to the ASCI for September (up from a discount of $1.40 in August);
- For Europe, a discount of $2.95 relative to North Sea for September (down from a discount of $1.95 in August);
- For Asia, a discount of $1.55 relative to Dubai-Oman (down from a discount of $1.10 in August).
While Kirkuk crude will sell for:
- For US, a premium of $0.25 relative to the ASCI for September (same as in August);
- For Europe, a discount of $1.80 relative to North Sea for September (down from a discount of $0.95 in August).
Iraq exported 627,000 barrels of crude a day to the US in 2008, representing about 6.4 per cent of all US oil imports, according to the Energy Information Administration.
Saudi Arabia this month cut prices for September liftings of all crude grades to Asia and lowered prices for light crudes to the US.
(Source: Wall Street Journal, Gulf News, Arab Times)