The Iraqi Oil Marketing Company (Sumo) has announced a reduction in the disparity of its official sale prices for crude oil designated for loading in April, aimed at both Asian and European markets. This decision aligns with the impending return of oil barrels to the market from eight OPEC+ producers, including Iraq, in the same month.
As per the latest pricing adjustments, the official selling prices for the Basra Mediterranean and Heavy Chamios grades have decreased by 50 cents per barrel when compared to March prices, reflecting the average assessments of Oman and Dubai benchmarks.
For buyers in Asia, the official sale price for Basra Crude has been set at a premium of $2.15 per barrel over the Oman/Dubai average, while the heavy Basra crude now carries a discount of 90 cents per barrel.
In Europe, the pricing for the two primary grades has also seen marginal declines on a month-over-month basis. The Basra Mediterranean Raw, designated for April deliveries, is being sold at a discount of $1.50 per barrel relative to the Brent benchmark, which represents a decrease of 25 cents per barrel from the previous month.
Conversely, the heavy Basra crude is priced at a $4.15 per barrel discount compared to Brent for April, which is a slight increase from the $4.05 per barrel discount recorded in March.
While the sale prices for heavy and medium crude from Basra to the North and South American markets have remained stable, there has been an uptick in the pricing for Iraqi Kirkuk crude. Specifically, Kirkuk Raws for loading in April are being sold at a premium of $1.50 per barrel over the Argus Summit Index, reflecting an increase of 30 cents per barrel.
The official sale price of Kirkuk crude bound for Europe has been fixed at a $1.00 per barrel premium over Brent crude.
The recent modest reductions in the official prices for shipments to Asia and Europe—major markets for Iraqi crude—are anticipated to bolster crude supplies in April. However, this shift could potentially exert downward pressure on the overall crude market.
Iraq, as part of a coalition of eight voluntary OPEC+ nations, currently holds approximately 2.2 million barrels per day of crude off the market. The coalition has confirmed its intention to gradually reintroduce these barrels starting in April, despite previous delays attributed to ongoing market conditions.
According to OPEC’s forecasts, Iraq’s crude production is set to rise by 12,000 barrels per day in April, although the country has also committed to offsetting any excess production throughout the year 2024.
