Iraq Raises Oil Prices to Asia

Iraq Raises Oil Prices to Asia
Iraq Raises Oil Prices to Asia

Iraq has raised its official selling price (OSP) to Asia in December for its main crude oil export grade, Basrah light, but cut the OSP to the US, the state oil marketing company said.

Iraqi state oil marketer Somo raised the Basrah Light crude OSP to Asia in December to minus $2.50 a barrel versus the Dubai/Oman average from minus $3.15 a barrel in November, TradeArabia reported.

Somo cut the Basrah Light OSP to the US in December to ASCI minus 10 cents a barrel from ASCI plus 40 cents a barrel in November. The direction of both moves mirrored those by Saudi Arabia, which raised prices to Asia while cutting them to the United States last week.

At the same time, oil prices have fallen from $115 a barrel in June to around $83. Baghdad’s fiscal breakeven price in 2014 is $109.4 a barrel, according to the International Monetary Fund.

  Rumaila Production Not Affected

Operations at Iraq’s biggest oilfield, Rumaila, have not been affected by sliding oil prices and the government’s battle against Islamic State militants, a senior executive at developer BP said.

Under a service agreement signed between Baghdad, BP and its Chinese partner CNPC to develop Rumaila, the companies will boost production to 2.1 million barrels per day (bpd) by 2024. Investments in the fields are made by the foreign oil firms, who then receive pay-per-barrel remuneration fees.

Iraq’s finance minister said this month that the cost of fighting Islamic State was undermining efforts to keep the country functioning and that the government had not been able to present a 2014 budget to parliament yet.