Iraq’s SOMO cuts prices for European buyers for first time since April

Iraq’s State Oil Marketing Organization said July 14 that it would cut its official selling for European customers and raise them for those in the US.

For Europe, SOMO’s price cuts come after three successive month of price rises as Iraq was pared back the sudden, sharp price cuts that it had made in response to the demand destruction caused by COVID-19.

For cargoes loading in August and destined for Europe, the Basrah Light OSP was cut by 50 cents/b to Dated Brent plus $1.60/b, while the price of Basrah Heavy was cut by 55 cents/b to Dated Brent minus 85 cents/b.

The price for Kirkuk Blend heading into the region was set at Dated plus $2.15/b, down 50 cents/b from July.

For the United States, prices for Basrah Light and Basrah Heavy were raised by 10 cents/b and 40 cents/b, respectively.

That leaves the lighter grade at a premium of 95 cents/b to the Argus Sour Crude Index and the heavier grade at a discount of 25 cents/b to that benchmark. The price of Kirkuk was left unchanged for the US.

Platts reported earlier that Asian buyers of Basrah Light and Basrah Heavy will be paying 85 cents/b and 75 cents/b more respectively, which took the heavier grade to its highest premium since April 2015, when SOMO started pricing the grade.

Often, Middle Eastern producers follow Saudi Arabia lead with their official selling prices. OPEC’s largest producer last week raised prices for lighter grades while cutting them for heavier grades across all regions.
Source: Platts