Iraq’s Oil Marketing Company (Somo) has informed its customers that it planned to change its price benchmark for Basra crude in Asia to DME Oman futures from the average of Platts’ Oman-Dubai prices with effect from January 2018, sources said on Monday.
The proposed change would mark a major shift by Iraq away from fellow members Saudi Arabia, Kuwait and Iran which have been using price assessments from global agency S&P Global Platts as their benchmark for decades.
It will affect the pricing of about 2mbpd of crude, or close to two-thirds of Iraqi crude exports from the southern port of Basra.
“The Iraqis probably want to get in on the game of being a benchmark grade,” a Singapore-based oil trader said, referring to Saudi’s role in determining prices in the region. Saudi Arabia typically sets the price trend for Iranian, Kuwaiti and Iraqi prices, affecting more than 12 million bpd of crude bound for Asia.