Iraq's SOMO expects new Basrah Medium grade sales of 1 mil b/d

Dubai — Iraq's State Oil Marketing Organization expects the new Basrah Medium grade to be introduced in January to have 1 million b/d of sales volume, a source with knowledge of the matter told S&P Global Platts on Nov. 19.

The total will be similar to Basrah Light, the person said, adding that SOMO has yet to decide where to load Basrah Medium.

SOMO also has yet to conclude 2021 term contracts because it is currently working on official selling prices, according to the source. SOMO couldn't be reached for comment.

Basrah Medium will have a specific gravity of around 27.9 API with a sulfur content of 3.0%. This makes it very similar in quality to Saudi Arabia's Arab Heavy, which has a gravity of 27.8 API and 2.75% sulfur.

Crudes such as Iranian Heavy, Brazil's Mero, Russia's Urals and Oman crude export blend are also similar. SOMO had previously said Basrah Medium would have an API gravity of 29-30 and 2% sulfur.

Changes were also made to its two existing grades. Iraq's flagship crude Basrah Light will now have an API of 31.4 and sulfur content of 2.74%. Basrah Heavy, which is a heavy sour crude, has a new API of 24 and 4.05% sulfur.

Oil production

Basrah Light and Basrah Heavy were initially marketed by SOMO with gravities of 34 API and 26 API, respectively, but these grades have been much heavier in recent years as new oil fields came on stream, changing their quality.

Iraq, OPEC's second largest oil producer, has been planning these changes for years to satisfy customer demand and present a greater variety to the market.

The country's oil production, including flows from the semi-autonomous Kurdish region, rose 6.7% in October from September, exceeding the country's OPEC+ quota, according to Nov. 5 official data from SOMO.

OPEC's second-largest oil producer pumped 3.84 million b/d in October, above September's 3.6 million b/d and its quota of 3.804 million b/d, according to SOMO figures.

Production from the federal government fields excluding the Kurdish region reached 3.4 million b/d in October, while output from the Kurdish region averaged 446,000 b/d, the SOMO figures showed. SOMO only markets federal crude.

Federal exports reached 2.876 million b/d in October, up 10% from 2.613 million b/d in September, according to SOMO.