Baghdad to implement new crude pricing formula in April
Iraq’s State Oil Marketing Organisation (Somo) is to base the price of crude oil sales to the US on the Argus Sour Crude Index (ASCI) from April, according to a statement released by Somo on 14 February.
Previously, Iraqi oil prices were based on the rival Platts West Texas Intermediate (WTI) index.
The ASCI benchmark was launched in May 2009 and is already used by Saudi Arabia and Kuwait as the basis for their crude sales to the US. The index is calculated from the average price of three grades of US crude from the Gulf of Mexico: Mars, Poseidon and Southern Green Canyon.
Iraq’s switch means more than 1.6 million barrels a day (b/d) of Gulf crude exports to the US will now be based on the ASCI price. Baghdad exported an average of 450,000 b/d to the US in 2009, while Saudi Arabia exported nearly 1 million b/d and Kuwait exported 180,000 b/d.