Iraq Tracks Saudi Arabia With Discounts for Its Crude Oil Sales
Nov. 10 (Bloomberg) — Iraq priced its crude more competitively in the U.S. while raising costs for customers in Asia and Europe, mirroring moves a week ago by Saudi Arabia, the world’s largest oil exporter.
The second-biggest producer in the Organization of Petroleum Exporting Countries is offering December cargoes of its Basrah Light grade to the U.S. at a discount to the local benchmark, instead of a premium charged in November, the country’s Oil Marketing Co., known as SOMO, said today. Saudi Arabia reduced prices last week for December shipments to the U.S.
“The trend setter is Saudi Arabia, the others follow,” Olivier Jakob, managing director at Petromatrix GmbH in Zug, Switzerland, said by e-mail.
Global oil prices slid into a bear market last month on speculation the biggest OPEC producers were discounting their crude to maintain market share, resisting calls to cut output amid slowing demand growth.
December shipments of Basrah Light to North and South America were set at a discount of 10 cents to the Argus Sour Crude Index, known as ASCI. They were set at premiums of 40 cents last month. Iraq also reduced U.S. prices for its Kirkuk grade to $1.75-a-barrel premium, from $2 in November.
Iraq narrowed the discount on sales of Basrah Light to Asia to $2.50 a barrel below the regional benchmark, from $3.15 in November. Discounts were also narrowed to Europe.
To contact the reporter on this story: Grant Smith in London at gsmith52@bloomberg.net To contact the editors responsible for this story: Alaric Nightingale at anightingal1@bloomberg.net James Herron
