Iraq faces resistance from Asian buyers on ‘ambitious’ oil price change

26 Aug 2017   Iraq

Iraq’s proposal to change the way it prices crude oil in Asia faces resistance from refiners who fear that longer lead times between pricing and deliveries will expose them to more risk. Iraq’s state oil marketer SOMO surprised traders this week by seeking feedback on plans to switch its Basra crude benchmark in Asia to pricing based off the Dubai Mercantile Exchange from January 2018, dropping quotes based on assessments by oil pricing agency S&P Global Platts. The move would affect the price of about 2 million barrels per day (bpd) of crude oil supplies to Asia, mainly shipped to India, China and South Korea. “The change is significant and will be watched very closely by not only Middle East producers but everyone involved,” said Oystein Berentsen, managing director for Strong Petroleum in Singapore. The new method would price Basra crude using the monthly average of […]

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