Iraq's SOMO sells Basra Medium at premium to May OSP

London (Quantum Commodity Intelligence) - Iraq's State Oil Marketing Organization has awarded its Basra Medium crude oil tender for loading May 29-31 at a premium of around $0.35/b over SOMO's official selling price for May, trade sources said Tuesday.

The 1-million barrel cargo was said to have gone to an undisclosed trading house. SOMO last week set the OSP for May-loading Basra Medium for Asia at Dubai/Oman average $0.60/b, an increase of $0.50/b from April.

The premium values the Basra Medium cargo at small premium to Dubai on a like-for-like cash basis, although Dubai cash for May is no longer trading. Quantum Monday assessed June cash Dubai at $64.80/b.

Basra Medium has proved a popular grade among customers in Asia, having been separated out from Basra Light/Heavy in late 2020. Basra Medium has a production capacity of around 1.1 million b/d, but traders say SOMO is producing below that capacity in order to comply with OPEC+ cuts. SOMO currently exports around 2.9 million b/d split fairly evenly between the three grades, although Basra Light is the largest export grade, followed by Medium and then Heavy.

Iraq typically looks to sell 70% of its exports to Asia and the balance to Europe and the US.

SOMO markets Basra Light with an API of 31-33 API, Medium with API gravity 27-29 and Basra Heavy as API 23-24. Traders say sulfur content of Basra Light is around 2.75%, Basra Medium around 3% and Heavy above 4% sulfur.

SOMO in the past has been a major seller of crude via tenders, often marketing several million barrels per month. But tenders are relatively infrequent now as SOMO typically has few spot barrels after supplying term customers, while complying with OPEC+ cuts.