Iraq lowers Asia, Europe-bound OSPs ahead of OPEC+ output boost

Iraq's state marketing agency, SOMO, has lowered its official selling price differentials for April-loading crude bound for Asia and Europe, with eight OPEC+ producers including Iraq set to finally reintroduce some barrels to the market that month.

The official prices were laid out in a pricing notice dated March 9.

OSPs for the Basrah Medium and Heavy grades bound for the Asian market were both down 50 cents/b from March prices, against the average of the Platts Oman and Dubai assessments.

For Asian buyers, the Basrah Medium OSP was nudged down to a $2.15/b premium to Oman/Dubai, while Basrah Heavy was dropped to a 90 cents/b discount.

Set prices for the two key grades to Europe also fell month-on-month, albeit less dramatically, according to the notice.

April-loading Basrah Medium to Europe is being sold at a $1.50/b discount to the Dated Brent benchmark, the differential down 25 cents/b month-on-month. Meanwhile, Basrah Heavy crude was priced at a $4.15/b discount to Dated Brent for April, compared with a $4.05/b discount for March-loading barrels.

Basrah Medium and Heavy crude to North and South America saw no change month-on-month in their OSPs, but Iraq's Kirkuk crude srengthened. For buyers in the Americas, April-loading Kirkuk crude is being sold at a $1.50/b premium to the Argus Sour Crude Index, up 30 cents/b.

The OSP for Kirkuk crude heading to Europe was unchanged at a $1/b premium to Dated Brent.

Slight reductions in OSPs for cargoes to Asia and Europe – where most of Iraq's customers are based – reflect plans to boost crude supply in April, likely softening the crude market.

Iraq is part of a group of eight OPEC+ voluntary cutters currently holding 2.2 million b/d of crude off the market.

The group announced recently that they would proceed with plans to gradually introduce those barrels from April, despite repeatedly delaying the move, citing market conditions.

Iraq's production quota is set to rise by 12,000 b/d month-on-month in April, according to the OPEC plans, although the country has also committed to compensate for overproduction in 2024.