Shafaq News/ Iraq has set the December official selling price (OSP) for Basra Light crude to Asia at 45 cents a barrel above the average of Oman/Dubai quotes, up 15 cents from the previous month, according to Reuters.
Basra Heavy to Asia in December was priced at minus 95 cents to the average of Oman/Dubai quotes, up 10 cents from the previous month, the document showed.
Iraq’s Oil Marketing Company (SOMO) revealed plans to launch a third crude oil export grade called Basra Medium in January. The new medium-sour crude will be created by splitting the existing Basra Light production into two grades.
Basra Light will register an API gravity of around 33 degrees after the split while Basra Medium’s gravity will be about 29 degrees, the letter showed. That would be similar to Qatar’s al-Shaheen crude grade. The existing Basra Heavy crude, which was created in 2015, has an API of around 24 degrees.
API gravity is an indicator of an oil’s density. Grades with a lower gravity number are considered heavier and tend to yield less gasoline and diesel when refined.
Basra Light, exported from the Basra Oil Terminal offshore southern Iraq, accounts for the bulk of the country’s exports and revenues. Iraq exported about 2.77 million barrels per day of Basra crude in October and it is the second-largest producer in OPEC.
The move could stabilize the quality of Iraqi crude for buyers, but their costs may increase if SOMO decides to remove a price mechanism currently used to compensate buyers for API gravity fluctuations, one of the sources told Reuters.
SOMO will set official selling prices for each of the three grades, according to the notice.