Iraq sharply cuts October OSPs for Asia, trims Europe

Quantum Commodity Intelligence - Iraq's State Oil Marketing Organization has cut Official Selling Prices for Asia in October while trimming Dated Brent-related premiums 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 +$1.40/b, compared to +$5.10/b for September, while Basrah Heavy to Asia was cut to -$2.50/b from +$0.50/b.

The reductions broadly followed the direction of OSP cuts that Saudi Arabia announced last week. For medium and heavy barrels, Aramco set Arab Medium at $3.75/b and Arab Heavy at $2.20/b over Platts Dubai/Oman.

Middle East OSPs, which include two months of market structure, narrowed as the key M1/M3 Dubai cash spread, closely monitored NOCs, averaged $4.89/b in August compared to $9.19/b in July and $7.54/b in June.

For Europe, which prices against Platts Dated Brent, Basrah Medium was cut by $0.90/b to -$9/b, while Basrah Heavy was cut $0.80/b to -$13.55/b and reflected the relative strength of the Dated Brent market. Kirkuk crude for Europe was down by $0.75/b to -$3.50/b.

Basrah Medium bound for the US was unchanged at -$2.10/b to the Argus ASCI benchmark, while Heavy was reduced by $0.80/b to -$13.55/b. US-bound Kirkuk crude was stable at $0.30/b over the ASCI quote.

Separately, several foreign oil companies operating in Iraq's semi-autonomous Kurdistan region are ignoring a barrage of legal challenges to their businesses by Baghdad, according to the Iraq Oil Report.

After two years of declining oil production in Iraqi Kurdistan, IOR flagged the imminent ramp-up of output from HKN's Swara Tika oil field, additional output from early production facilities at Gulf Keystone Petroleum's Shaikan, and gains from the Atrush field operated by the UAE's Taqa, according to plans recently released by those companies.