Iraq's state-owned oil marketer Somo issued what appears to be its second tender to sell Basrah crude on a spot basis since the start of the US-Iran war.
Somo offered medium sour Basrah Medium and heavy sour Basrah Heavy loading across 1-10, 11-20 and 21-30 September on a fob basis from Iraq's Basrah Oil Terminal (BOT), according to a tender document seen by Argus. The tender closes on 26 August.
Potential buyers were invited to bid for their desired volume, and to submit bids at a differential to the pricing benchmark of their intended destination. Bids for Asia-Pacific bound cargoes should be submitted at a differential to the September average of Dubai and Oman assessments, while buyers in Europe and the US should submit bids at a differential to North Sea Dated and the Argus Sour Crude Index (ASCI), respectively.
This appears to be the second tender that Somo has issued to sell Basrah cargoes since the effective closure of the strait of Hormuz after the US-Iran war began at the end of February. The firm issued a tender in late June offering at least 2mn bl of July-loading Basrah Medium and Basrah Heavy, also on a fob basis from BOT, according to Argus' tracking.
Recent spot Basrah crude offers have been made by international trading firms, not Somo, with cargoes offered on a fob ship-to-ship (STS) transfer basis near Fujairah in the Gulf of Oman, and on a delivered basis to buyers across Asia-Pacific, Europe and the Mediterranean.
Besides the rare spot sale tenders, Somo has consistently offered term crude at steep discounts to official selling prices to its customers to lift their contractual term volumes at BOT, although this has not drawn much interest from Asian refiners. The Iraqi cabinet also approved on 18 August a new crude discount mechanism, although it did not identify which buyers or purchases would qualify for the mechanism.
