Iraq Braves Break With Tradition to Get Oil’s True Worth

30 Aug 2017   Iraq, Prices

OPEC’s second-largest producer is stepping up the campaign to get more for its oil by looking to revamp the way it sells crude to its biggest customers. (Bloomberg) — OPEC’s second-largest producer is stepping up the campaign to get more for its oil by looking to revamp the way it sells crude to its biggest customers. Iraq is considering plans to use a new reference price for sales to Asia, according to traders, who received a notice from the state oil company SOMO. The producer is proposing to use a contract traded on the Dubai Mercantile Exchange as a benchmark for pricing Basrah crude, replacing the formula it currently uses along with competitors such as Saudi Arabia, Kuwait and Iran. As a persistent oversupply caps oil prices around $50 a barrel and OPEC’s output quotas limits production, Iraq’s looking to squeeze every drop of value out of its crude. […]

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