Iraq Raises September Official Selling Price for Basra Medium Crude to Asia

Iraq's state oil marketer, SOMO, announced on Monday it has raised the official selling price (OSP) for its flagship Basra Medium crude oil for Asian customers for September loadings.

Key Price Adjustments

According to a document from SOMO, the price for Asian buyers was set at a discount of $4.00 per barrel to the average of Oman/Dubai quotes. This represents a significant $2.50 per barrel increase from the August OSP, which was set at a discount of $6.50 per barrel.

Official selling prices for other regions were also established for September:

• Europe: The Basra Medium OSP was set at a discount of $4.85 per barrel to Dated Brent.
• North & South America: The price was set at a premium of $5.10 per barrel over the Argus Sour Crude Index (ASCI).

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Market Context

Official selling prices are set monthly by major oil-producing nations and signal their assessment of market fundamentals for the upcoming month. The decision to narrow the discount for Asia, the world's largest oil-consuming region, can suggest that Iraq perceives robust demand or a tighter supply-demand balance in the market.

Oil traders and refiners closely monitor these price adjustments from key Middle Eastern producers like Iraq and Saudi Arabia. The moves often influence sentiment and can serve as a bellwether for broader pricing trends in the physical crude market.