Platts to launch Basrah Medium crude assessment Feb 1, 2021

S&P Global Platts proposes to begin publishing price assessments for Iraqi Basrah Medium crude oil on an FOB basis from Feb. 1, 2021.

The assessments would reflect 1-million-barrel cargoes of Basrah Medium loading from Iraq on a free-on-board basis.

In line with other Platts assessments for crudes around the world and in the Middle East, Platts new assessments would reflect cargoes traded on a destination-free basis.

Spot market trades for cargoes with regional restrictions in place would be normalized in value to reflect open destination.

Platts would publish outright Basrah Medium assessment in USD/barrels for two consecutive months from the month of publication. In addition to the outright assessment, Platts would publish a differential to the grade's official selling price for the month of loading.

For example, in February Platts would publish outright prices and differentials to OSP for Basrah Medium cargoes loading in March (M+1) and April (M+2). Platts would assess the value of Basrah Medium cargoes using information on bids, offers and trades in the Middle East Sour Market on Close assessment process, trades on exchanges, tenders, and in the over-the-counter markets.

Platts outright assessments for Basrah Medium would reflect traded values for the grades, without any adjustment in value due to quality differences from contractual standards.

Platts understands that a system of API deescalators is in place for Basrah Medium for any deviation in quality from contractual standards.

The API standard for Basrah Medium is currently set at 29 API and with a quality deescalator of 40 cents/b per one degree change in API. Sulfur content is estimated about 3% by weight.

Iraq's SOMO is expected to begin regular shipments of Basrah Medium crude starting January 2021, after it announced plans in November to further split the Basrah crude stream.

In 2015, Iraq segregated the Basrah crude stream into Basrah Light and Basrah Heavy to improve and stabilize the quality of the crude oil it exports. From January 2021, Basrah crude grades would comprise Basrah Light, Basrah Medium and Basrah Heavy.

Platts existing assessments for Basrah Light and Basrah Heavy crudes continue to reflect SOMO's contractual quality specification that are set to change from cargoes loading January 2021 onward.

Platts understands SOMO has set the contractual API density for Basrah Light at 33 degrees and Basrah Heavy at 24 degrees. The quality deescalator for Basrah Light and Basrah Heavy remain unchanged at 40 cents/b/API degree and 60 cents/b/API degree, respectively.

Please send all comments, feedback and questions to asia_crude@spglobal.com and PriceGroup@spglobal.com by Dec. 31, 2020.

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