Iran Energy News Oil, Gas, Petrochemical and Energy Field Specialized Channel
Related Articles
Iraq has informed its customers that it plans to change its price benchmark for Basra crude in Asia to DME Oman futures from January. the country`s latest move to reform its oil sales.
The proposed change by state-oil marketer SOMO would mark a major shift by OPEC`s second-largest producer away from fellow members Saudi Arabia. Kuwait and Iran. which have been using price assessments from global agency S&.P Global Platts as their benchmark for decades.
Iraq has been reforming its oil sector – including launching crude sales through auctions on DME to achieve higher prices and setting up trading and shipping joint ventures – in what is seen as a drive to gain influence and bring in more revenue as the country seeks to rebuild its economy.
`DME has shown good practice and better transparency than Platts. they also have an auction system.` one source familiar with the matter said.
The move also appears to reflect SOMO`s aim to lead a change in crude pricing rather than following Saudi Arabia. OPEC`s biggest producer whose crude official selling prices (OSPs) set the trend for other major Middle East producers.
Iraqi crude grades are not used in any of the Middle East price benchmarks. Platts assesses its Dubai price based on deliveries of Dubai. Oman. Abu Dhabi`s Upper Zakum and Qatari Al-Shaheen crude.
`The Iraqis probably want to get in on the game of being a benchmark grade.` a Singapore-based oil trader said.
