Plans for 2 Crude Export Grades Shelved

By John Lee.

Iraq’s State Oil Marketing Organization (SOMO) has reportedly abandoned plans to sell two grades of crude oil from its southern Gulf terminals next year.

Platts reports that SOMO informed customers last week that "due to logistical issues" a single type of crude will continue to be marketed in 2015, but with two ranges of API de-escalator:

  • For crudes with 27-34 API, the de-escalator is $0.40/barrel per API degree;
  • For crudes with API below 27 have a de-escalator of $0.60/b per API.

The President of BP Iraq, Michael Townshend, said recently that the country would have trouble exporting two separate grades due to a lack of pipeline and storage capacity.

Iraq currently has only eight tanks at Fao, with another eight planned.

(Source: Platts)

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