Iraq’s state marketing agency, SOMO, has announced a reduction in its official selling price differentials for April-loading crude oil destined for Asia and Europe. This adjustment comes as eight OPEC+ producers, including Iraq, prepare to reintroduce barrels to the market in April.
The pricing notice issued on March 9 reveals that the official selling prices (OSPs) for Basrah Medium and Heavy grades bound for the Asian market have been lowered by 50 cents per barrel compared to March figures. Specifically, the Basrah Medium OSP is set at a $2.15 per barrel premium to Oman/Dubai benchmarks, while the Basrah Heavy OSP has decreased to a 90 cent per barrel discount.
In terms of pricing for Europe, the April-loading Basrah Medium is being sold at a $1.50 per barrel discount to the Dated Brent benchmark, reflecting a month-on-month reduction of 25 cents per barrel. The price for Basrah Heavy crude has been adjusted to a $4.15 per barrel discount for April, slightly higher than the $4.05 per barrel discount for March-loading barrels.
There have been no changes in OSPs for Basrah Medium and Heavy crude intended for North and South America, although Iraq’s Kirkuk crude has seen an improvement. April-loading Kirkuk crude is priced at a $1.50 per barrel premium to the Argus Sour Crude Index, an increase of 30 cents per barrel, while the price for Kirkuk crude bound for Europe remains at a $1 per barrel premium to Dated Brent.
These slight reductions in OSPs for Asian and European markets—where Iraq’s primary customers are located—indicate Iraq’s strategy to enhance crude supply in April, which is expected to ease pressure on the crude market. Iraq is part of a coalition of eight OPEC+ countries that currently have 2.2 million barrels per day off the market and plans to gradually increase output next month.
According to OPEC’s plans, Iraq’s production quota will increase by 12,000 barrels per day in April, although it is also obligated to compensate for any overproduction in 2024.