Iraq cuts December OSPs for Asia, hikes differentials for Europe, US

Quantum Commodity Intelligence - Iraq's State Oil Marketing Organization (SOMO) has cut Official Selling Prices (OSP) for Asia in December while raising Dated Brent-related prices to Europe, according to a document sent to customers.

SOMO set the OSP for Basrah Medium, its primary export grade, to Asia at Platts Dubai/Oman +$0.90/b, compared to +$1.70/b for November, while Basrah Heavy to Asia was reduced to -$3.25/b from -$2.10/b.

The hikes broadly followed the direction of the OSP cuts that Saudi Arabia announced last week for medium and heavy barrels. Arab Medium was cut to +$3.20/b from +$4/b, while Arab Heavy was set at +$1.25/b versus +$2.45/b for November barrels, as sluggish fuel oil cracks weighed on heavier grades.

Asian OSPs, which include two months of market structure, narrowed as the key M1/M3 Dubai cash spread averaged $4.75/b in October compared to $5.36/b in September, according to Quantum data.

So far in November, the M1/M3 Dubai cash spread has averaged $4.15/b, which could hint at further cuts in January.   

West

Quantum's monthly average price for December-loading Dubai traded last month was $91.13/b, a marginal gain of 0.25%.

However, prices for Western-bound cargoes were increased for European refiners, in particular, looking for replacement Russian barrels as sanctions kick in on 5 December.   

For Europe, which prices against Platts Dated Brent, Basrah Medium was raised by $1/b to -$8.20/b, while Basrah Heavy increased $0.70/b to -$13.25/b.

Kirkuk crude for Europe was up by $1.05/b to -$2.55/b.

Basrah Medium bound for the US was up $0.30/b at -$1.70/b to the Argus ASCI benchmark, while Heavy was also increased $0.30/b to -$5.75/b.