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Basra crude price has been set by Iraq, with delayed launch
16 Apr 2015
According to industry sources, though Iraq has set the first monthly price for its new Basra Heavy crude for May, there is slight delay in process of launching grades.
Four industry sources stated that the country's State Oil Marketing Organization (SOMO) did not allocate any supply of Basra Heavy crude in May. The No.2 OPEC producer has previously said it planned to split its southern oil production into two streams from May to resolve quality issues dogging its exports.
SOMO did not reply to an e-mail seeking comment. Basra Heavy, which could account for 13 percent of Iraq's southern oil exports, will be sold to Asia at $6.85 a barrel
below Oman/Dubai quotes in May, SOMO said.
"The discount is bigger than I'd expected," said a trader with a North Asian refiner, adding that the grade was more attractively priced to Asia than to Europe or the United States.
Traders stated that if the API of the crude falls below 26 degrees, additional discounts at 60 cents per barrel per drop in API would be applied. The grade has been compared with Iranian Soroush crude which was priced at $6.55 a barrel below Oman/Dubai quotes in May.
SOMO mentioned that it would leave the May official selling price (OSP) for Basra Light crude to Asia unchanged from the previous month at minus $2.80 a barrel against the average of Oman/Dubai quotes, despite small price hikes by other Gulf producers.
This will take the May OSP for Basra Light to 80 cents a barrel below Saudi's Arab Medium, the widest discount since February.
According to traders, the increased discount may boost demand for the Iraqi grade after uncertainty over the production split stalled trade for May-loading Basra Light last month.
In other regions, the May Basra Light OSP to the North and South American markets was set at the Argus Sour Crude Index (ASCI) minus $0.15 a barrel, down from the previous month. The price of Kirkuk to the U.S. increased to ASCI plus $0.85 a barrel. The May OSP for Basra Light to Europe rose by $0.20 to dated Brent minus $5.00 a barrel.
The May Kirkuk OSP to Europe fell to $4.70, up $0.10 from the previous month.
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16 Apr 2015
According to industry sources, though Iraq has set the first monthly price for its new Basra Heavy crude for May, there is slight delay in process of launching grades.
Four industry sources stated that the country's State Oil Marketing Organization (SOMO) did not allocate any supply of Basra Heavy crude in May. The No.2 OPEC producer has previously said it planned to split its southern oil production into two streams from May to resolve quality issues dogging its exports.
SOMO did not reply to an e-mail seeking comment. Basra Heavy, which could account for 13 percent of Iraq's southern oil exports, will be sold to Asia at $6.85 a barrel
below Oman/Dubai quotes in May, SOMO said.
"The discount is bigger than I'd expected," said a trader with a North Asian refiner, adding that the grade was more attractively priced to Asia than to Europe or the United States.
Traders stated that if the API of the crude falls below 26 degrees, additional discounts at 60 cents per barrel per drop in API would be applied. The grade has been compared with Iranian Soroush crude which was priced at $6.55 a barrel below Oman/Dubai quotes in May.
SOMO mentioned that it would leave the May official selling price (OSP) for Basra Light crude to Asia unchanged from the previous month at minus $2.80 a barrel against the average of Oman/Dubai quotes, despite small price hikes by other Gulf producers.
This will take the May OSP for Basra Light to 80 cents a barrel below Saudi's Arab Medium, the widest discount since February.
According to traders, the increased discount may boost demand for the Iraqi grade after uncertainty over the production split stalled trade for May-loading Basra Light last month.
In other regions, the May Basra Light OSP to the North and South American markets was set at the Argus Sour Crude Index (ASCI) minus $0.15 a barrel, down from the previous month. The price of Kirkuk to the U.S. increased to ASCI plus $0.85 a barrel. The May OSP for Basra Light to Europe rose by $0.20 to dated Brent minus $5.00 a barrel.
The May Kirkuk OSP to Europe fell to $4.70, up $0.10 from the previous month.
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