Iraq's Oil Marketing Company 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
By Florence Tan and Rania El Gamal
SINGAPORE/DUBAI, Aug 21 (Reuters
) - 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, two sources with knowledge of the matter said on Monday.
The proposed change would mark a major shift by OPEC's second-largest producer 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 2 million barrels per day 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.
World's top exporter Saudi Arabia typically sets the price trend for Iranian, Kuwaiti and Iraqi prices, affecting more than 12 million bpd of crude bound for Asia.
SOMO's letter will kickstart a consultation round between SOMO and its customers, trade sources said, adding that details of the proposed change were still vague.
SOMO could not be immediately reached for comment.
Since April, the producer has been selling 1-2 cargoes of Basra crude per month through an auction platform on the Dubai Mercantile Exchange as a form of price discovery.
The Oman crude futures , launched in 2007 by the DME
, is the only liquid futures contract for Middle East crude in Asia.
(Reporting by Florence Tan in SINGAPORE and Rania El-Gamal in DUBAI; Editing by Richard Pullin and Gopakumar Warrier) ((Florence.Tan@thomsonreuters.com; +65 6870 3497; Reuters