Iraq is allowing buyers to load crude without giving its destination
Singapore — Oil cartel Opec’s second-biggest producer is relinquishing some control over its prized oil in exchange for better prices. In a rare move, Iraq is allowing buyers to load its crude without saying where the cargo will finally end up. They will only have to let the Middle East producer know about the destination two weeks after the shipment’s bill of lading, under the terms by which 4-million barrels of its March supply was sold via auctions this month. This enables buyers to take a decision at the time of loading on the best location for a cargo, based on several factors, such as comparative pricing and whether a particular region is short of supply. The strategy presents some advantages for Iraq as well: the two shipments loading in March sold at auction on the Dubai Mercantile Exchange fetched a premium to the oil’s official selling price. Basrah Light crude for March was sold at more than 40c per barrel over its official price, compared with a February lot that traded ...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.