• Iraq will launch new Basra medium crude oil export next year

    [ Time:2020-11-07 | Hits:97 ]

    SOMO has informed customers that it plans to launch a third export grade of crude oil, Basra medium, in January next year.

    The new medium sulfur crude oil will be produced by dividing the existing Basra light crude oil production into two grades, according to a source and a copy of the Reuters announcement on November 2.

    Basra light crude oil exported from the Basra oil terminal off the southern coast of Iraq accounts for the majority of the country's exports and revenues. Iraq exported about 2.77 million barrels of Basra crude oil a day in October, making it the second largest crude oil producer of the organization of petroleum exporting countries.

    According to the information, the API gravity of Basra light crude oil will be about 33 degrees, and that of Basra medium crude oil will be about 29 degrees. That would be similar to Qatar's al Shaheen grade.

    The existing Basra heavy crude oil was produced in 2015, and its API is about 24 ℃.

    API gravity is an index of oil density. Grades with lower gravity numbers are considered heavier and tend to produce less gasoline and diesel during refining.

    One of the sources said the move could stabilize the quality of Iraqi crude oil, but the cost could rise if SOMO decides to cancel the price mechanism currently used to compensate for oil price fluctuations.

    According to the notice, SOMO will set official prices for the three grades of crude oil.

    Buyers must inform SOMO by November 13 of the number they plan to upgrade for each level in 2021. Basra medium can be used as part of the quantity already requested by the buyer or as an additional quantity in 2021.