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Iraq’s SOMO raises March OSPs, with biggest hikes for Europe-bound crude

Iraq’s State Oil Marketing Organization issued its March official selling prices, with a hike in differentials for all Europe-bound grades, while those for the US and Asia saw slight increases, according to a company notice dated Feb. 10.

For Asian buyers, SOMO set the March OSP for the new Basrah Medium crude at a discount of 15 cents/b to the monthly average of Platts Oman and Dubai assessments, an increase of 10 cents/b from February.

Iraq exported 891,000 b/d of the new Basrah Medium crude grade in January, comprising 32% of total oil exported from the southern Gulf terminals during that month, according to sources from SOMO. It announced plans in November to split the Basrah crude stream.

It raised the March OSP of Asia-bound Basrah Light crude by 5 cents/b from February to a premium of $1.15/b to the Oman/Dubai average, while the region’s Basrah Heavy OSP was kept unchanged at a discount of $1.40/b.

For cargoes loading in March and destined for Europe, the Basrah Light and Basrah Heavy OSPs were set at Dated Brent minus 60 cents/b and minus $3.50/b, respectively, up 90 cents/b and $1/b from February. The March OSP for Europe-bound Kirkuk was set at Dated Brent plus 60 cents/b, up by 90 cents/b from February. The price for Europe-bound Basrah Medium crude loading in March was set at minus $2.05 /b against Dated Brent, up $1.10/b from February.

The US-bound March OSP for Basrah Heavy was raised 25 cents/b from February and set at a discount of $1.50/b against the Argus Sour Crude Index, while Basrah Light was raised by 20 cents/b. The OSP for US-bound Kirkuk was raised by 5 cents/b month on month to a premium of 95 cents/b against ASCI. The March OSP for the new Basrah Medium crude bound for the US was set at a discount of 50 cents/b against the benchmark, up 30 cents/b from February.

The OSPs were largely in line with the trend kicked off by Saudi Aramco last week, which raised its March OSPs for Europe and kept those for Asia unchanged.

SOMO set the contractual specific density for Basrah Medium grade at 29 API and for Basrah Light crude at 33 API, Platts reported previously. For any slippage below the contractual API, SOMO would compensate the buyers of both grades at a rate of 40 cents/b per API, according to sources close to the matter. For Basrah Heavy, the contractual specific density is set at 24 API with 60 cents/b per API for any slippage in the density, the sources said.
Source: Platts

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