Iraq Slashes Crude Prices

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Iraq's State Oil Marketing Organization (Somo) has slashed the official formula prices for its crude exports to Asia by 30¢/bbl or more relative to comparable Saudi crudes. It did so even though market players viewed the Saudi formula prices as moderate, with Saudi Aramco showing restraint in increasing prices (IOD Aug.5'21). Somo kept the Asian formula price of its medium, sour Basrah Light crude unchanged from last month despite Aramco raising the level of comparable Saudi Arab Light by 30¢/bbl (IOD Jul.13'21). Somo also cut 10¢/bbl off the Asian formula price of its heavy, sour Basrah Heavy crude despite Aramco raising the price of comparable Arab Heavy by 20¢/bbl. This effectively meant that Somo devalued Basrah Light and Basrah Heavy by 30¢/bbl each relative to comparable Saudi crudes. Somo also trimmed 5¢/bbl off the Asian formula price of its Basrah Medium crude despite Aramco raising the level of comparable Arab Medium by 30¢/bbl. This meant that Basrah Medium became 35¢/bbl cheaper versus Arab Medium. Kuwait and Iran also trimmed the Asian formula prices of some of their crudes relative to comparable Saudi grades. Major Mideast OSPs to Asia (US$) Sep '21 Aug '21 Chg. IRAN Iran Light 2.65 2.40 0.25 vs. Arab Light -0.35 -0.30 -0.05 Iran Heavy 1.55 1.30 0.25 vs. Arab Medium -0.90 -0.85 -0.05 Foroozan 1.60 1.35 0.25 vs. Arab Medium -0.85 -0.80 -0.05 Soroush -2.25 -2.45 0.20 IRAQ Basrah Light 2.25 2.25 0.00 vs. Arab Light -0.75 -0.45 -0.30 Basrah Medium 1.30 1.35 -0.05 vs. Arab Medium -1.15 -0.80 -0.35 Basrah Heavy -0.75 -0.65 -0.10 vs. Arab Heavy -2.15 -1.85 -0.30 KUWAIT Kuwait Export 2.35 2.05 0.30 vs. Arab Medium -0.10 -0.10 0.00 Kuwait Super Light 3.15 2.60 0.55 vs. Arab Super Light -1.30 -1.25 -0.05 SAUDI ARABIA Arab Super Light vs. O/D 4.45 3.85 0.60 Arab Light vs. O/D 3.00 2.70 0.30 Arab Medium vs. O/D 2.45 2.15 0.30 Arab Heavy vs. O/D 1.40 1.20 0.20 Iranian and Iraqi prices as a differential to

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