Iraq says still discussing plan to change Basra crude oil price benchmark

SINGAPORE/DUBAI: Iraq’s Oil Marketing Company (SOMO) is still engaged in internal discussions on a proposal to change its Basra crude price benchmark in Asia, its director-general said in an e-mailed statement.
SOMO, Iraq’s state oil marketer, surprised traders last week by seeking feedback on plans to switch its Basra crude benchmark in Asia to pricing based off the Dubai Mercantile Exchange from January 2018, dropping quotes based on assessments by oil pricing agency S&P Global Platts.
The firm has requested customer feedback on the potential change by August 31, and Director-General Falah J Alamri said talks were still under way within SOMO.
“However, we will reveal the final outcomes in due course,” the official wrote in an e-mailed document dated August 28.
The move would affect the price of about 2 million barrels per day (bpd) of crude oil supplies to Asia, mainly shipped to India, China and South Korea.
Some refiners said they fear that longer lead times between pricing and deliveries will expose them to more risk, although others say the new pricing scheme allows traders holding Basra cargoes without fixed destinations more time to decide where to sell their oil, based on regional price differences. — Reuters