SOMO to sell second Basrah Light cargo on DME auction platform

Dubai: The Dubai Mercantile Exchange (DME) announced today that SOMO, the Iraqi oil marketing company, is set to sell a second consignment of Basrah Light crude on the DME auction platform, following the success of the first auction.

Two million barrels of Basrah Light crude for July delivery will be put on auction on May 31.

“Our aim is to provide all our customers with fair and equal access to our crude oil, and the DME auction platform is the best way to realise it. We started with the first auction in April, and we were happy with the level of participation which endorses the demand for additional Iraqi crude in Asia,” Dr Falah J. Alamri, SOMO director-general, said.

“SOMO always looks for new and innovative ways to market and sell crude oil in order to satisfy the needs of refineries in Asia, in a transparent, safe and regulated manner. This is what DME auction is offering today,” he added.

The floor price for the second cargo will be July 2017 official selling price (OSP), which will be published during the first 10 days of June, plus at least 1 cent per barrel. The auction is open for SOMO term lifters who have at least one refinery in Asia.

“The decision by SOMO to sell additional barrels of Basrah Light crude oil on the DME auction platform reflects their commitment to find new ways to capitalise on emerging business opportunities. The DME auction platform was introduced to improve transparency in trade, and to provide market participants with the flexibility to buy and sell physical commodities via an electronic system. We are happy that more and more producers and consumers see the value that such a platform brings to their businesses — in terms of pricing, security and convenience,” Ahmad Sharaf, chairman of the DME, said in a statement.

The first auction, held on April 28 tp sell 2 million barrels for June delivery, witnessed the participation of more than 20 companies. Forty bids were recorded in two minutes, with a premium of 31 cents above the June OSP, confirming the appetite for additional Basrah Light crude in Asia.