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Reuters: Iraq plans to change the benchmark price for Basra crude in defiance of Saudi Arabia's role
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Reuters: Iraq plans to change the benchmark price for Basra crude in defiance of Saudi Arabia's role
Reuters: Iraq plans to change the benchmark price for Basra crude in defiance of Saudi Arabia's role
Tuesday 22 August
Alsumaria News / Baghdad
revealed two sources familiar with the matter, said that the Iraqi Oil Marketing Company (SOMO) informed its customers that it intends to change the measurement price of crude Basra in Asia to the futures price of Omani crude in the Stock Exchange Dubai Energy Average Khami prices of Dubai and Oman on the Platts platform as of January 2018.
According to Reuters , " the proposed change his major shift by Iraq 's second - largest producer in OPEC, to come out on what he used it for decades he and other organization members such as Saudi Arabia, Kuwait and Iran to build upon the ratings agency Standard & Poor 's global Platts global prices Pricing their raw materials ".
"The change will also affect the pricing of more than 12 million barrels per day of Middle Eastern ore destined for Asia, in defiance of the role of Saudi Arabia, the world's largest oil exporter."
"In an attempt to reach the actual value of our crude exports to Asia and to be consistent with market perceptions, we intend to make a change in the current pricing equation for the Asian market," Sumo said in a letter to customers on Aug. 20.
Sumo asked its customers to give their opinion on the plan by Aug. 31.
"There will be no statement on the matter at the moment," the DME said.
Iraq is reforming its oil sector, including the launch of crude sales through auctions at the Dubai Mercantile Exchange to reach higher prices and set up joint ventures to trade and transport crude to understand the dynamics of the market, seen as a plan to gain influence and increase revenues as the country seeks to rebuild its economy.
"The DME has shown better practices and better transparency than Platts and they also have an auction system," Reuters quoted a source familiar with the matter as saying.
The move also appears to be in line with Somo's goal of driving a change in crude pricing rather than following Saudi Arabia, Opec's biggest producer, whose official selling price sets the trend for other major producers in the Middle East.
Iraq's raw materials are not used in any price indices in the Middle East, and the Platts valuation of the Dubai crude price is based on the deliveries of raw materials from Dubai, Oman, ZAKOM, Abu Dhabi and Qatar's Shaheen oil.
"The Iraqis are more likely to have a gauge ore," said a Singapore oil trader.
According to her letter to clients, Somo proposed pricing crude shipments this month using Oman crude prices for two months earlier on the Dubai Mercantile Exchange.
"Such a mechanism aims to show the real value of Iraqi crude based on the month of trading in the Asian market," the company said in the letter.
This will affect the pricing of about two million barrels of crude per day or nearly two-thirds of Iraqi crude exports from the southern port of Basra, the export port of most of Iraq's oil.
"The Iraqis have recently been able to achieve a good price premium through the DME auction, so there is some value added," said a source in the oil sector of a Middle Eastern oil producer.
Oman Oil Futures, launched by the Dubai Mercantile Exchange in 2007, is the only high-liquidity crude futures contract for Middle East raw materials in Asia.
Sumo is not expected to change the pricing of its oil destined for Europe and the United States, one source said. Sumo is exporting its exports to Europe based on Brent crude while the Argos high crude index uses sulfur to price its oil sales to the United States.
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Tuesday 22 August
Alsumaria News / Baghdad
revealed two sources familiar with the matter, said that the Iraqi Oil Marketing Company (SOMO) informed its customers that it intends to change the measurement price of crude Basra in Asia to the futures price of Omani crude in the Stock Exchange Dubai Energy Average Khami prices of Dubai and Oman on the Platts platform as of January 2018.
According to Reuters , " the proposed change his major shift by Iraq 's second - largest producer in OPEC, to come out on what he used it for decades he and other organization members such as Saudi Arabia, Kuwait and Iran to build upon the ratings agency Standard & Poor 's global Platts global prices Pricing their raw materials ".
"The change will also affect the pricing of more than 12 million barrels per day of Middle Eastern ore destined for Asia, in defiance of the role of Saudi Arabia, the world's largest oil exporter."
"In an attempt to reach the actual value of our crude exports to Asia and to be consistent with market perceptions, we intend to make a change in the current pricing equation for the Asian market," Sumo said in a letter to customers on Aug. 20.
Sumo asked its customers to give their opinion on the plan by Aug. 31.
"There will be no statement on the matter at the moment," the DME said.
Iraq is reforming its oil sector, including the launch of crude sales through auctions at the Dubai Mercantile Exchange to reach higher prices and set up joint ventures to trade and transport crude to understand the dynamics of the market, seen as a plan to gain influence and increase revenues as the country seeks to rebuild its economy.
"The DME has shown better practices and better transparency than Platts and they also have an auction system," Reuters quoted a source familiar with the matter as saying.
The move also appears to be in line with Somo's goal of driving a change in crude pricing rather than following Saudi Arabia, Opec's biggest producer, whose official selling price sets the trend for other major producers in the Middle East.
Iraq's raw materials are not used in any price indices in the Middle East, and the Platts valuation of the Dubai crude price is based on the deliveries of raw materials from Dubai, Oman, ZAKOM, Abu Dhabi and Qatar's Shaheen oil.
"The Iraqis are more likely to have a gauge ore," said a Singapore oil trader.
According to her letter to clients, Somo proposed pricing crude shipments this month using Oman crude prices for two months earlier on the Dubai Mercantile Exchange.
"Such a mechanism aims to show the real value of Iraqi crude based on the month of trading in the Asian market," the company said in the letter.
This will affect the pricing of about two million barrels of crude per day or nearly two-thirds of Iraqi crude exports from the southern port of Basra, the export port of most of Iraq's oil.
"The Iraqis have recently been able to achieve a good price premium through the DME auction, so there is some value added," said a source in the oil sector of a Middle Eastern oil producer.
Oman Oil Futures, launched by the Dubai Mercantile Exchange in 2007, is the only high-liquidity crude futures contract for Middle East raw materials in Asia.
Sumo is not expected to change the pricing of its oil destined for Europe and the United States, one source said. Sumo is exporting its exports to Europe based on Brent crude while the Argos high crude index uses sulfur to price its oil sales to the United States.
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Dinar Daily :: DINAR/IRAQ -- NEWS -- GURUS and DISCUSSIONS :: IRAQ and DINAR -- ARTICLE BASED INFORMATION and DISCUSSIONS
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