Baghdad: Iraq cut the official selling price for September shipments of its Basra Light crude for Asia, reducing the cost to the lowest level in eighteen months.
The producer also pared prices for both its Basra and Kirkuk crude grades loading next month for Europe, and it raised the price for Basra Light shipments to the US, Iraq's state oil marketing company said in an emailed statement yesterday.
Iraq's price cut to Asia came after Saudi Arabia cut prices to Asian buyers earlier this month. Iraq sold at least one-third of its crude to customers in Asia in 2008, according to the most recent annual data available from the US Energy Information Administration.
Stagnant production
Iraq aims to ramp up its stagnant production with help from foreign oil companies including Royal Dutch Shell Plc and Exxon Mobil, which have secured contracts to develop fields suffering from years of under-investment.
The Iraqi statement did not give any details on sales volumes.
The discount for Basra Light heading to Asia deepened by 45 cents a barrel, to $1.55 a barrel below the Dubai-Oman crude benchmark for loadings next month. This is the deepest discount Iraq has offered since it priced the grade at $2.15 a barrel below the benchmark in February 2009.
Dubai-Oman benchmark
The Middle East's largest oil producers issue official price lists each month, most of them expressing prices for their crudes in relation to regional benchmarks. Iraq prices its sales to Asia off the Dubai-Oman benchmark published by Platts, the energy-information division of McGraw-Hill.
The discount for Basra crude to Europe widened by $1 a barrel, to $2.95 a barrel below Dated Brent. The Kirkuk grade will cost 85 cents a barrel less next month, at a $1.80-a-barrel discount to Brent, according to the Iraqi statement.
The discount for Basra Light to the US narrowed to $1.30 a barrel below the Argus Sour Crude Index, or ASCI, price, making the grade 10 cents a barrel more expensive than in August, the marketing company said.
The price for Kirkuk crude was unchanged at a 25 cents-a-barrel premium to the ASCI benchmark.
Iraq exported 627,000 barrels of crude a day to the US in 2008, representing about 6.4 per cent of all US oil imports, according to the Energy Information Administration.
Saudi Arabia this month cut prices for September liftings of all crude grades to Asia and lowered prices for light crudes to the US.
