SOMO: A new pricing standard for spot oil sales

Baghdad - INA

The Iraqi Marketing Company (SOMO) waved today, Thursday to adopt standards as the basis for future pricing of spot oil sales. 

The Deputy General Manager of the company, Ali Al-Shatri, said in a statement translated by the Iraqi News Agency (INA) on the ( S&P Global ) website , that "all options are open on the subject of pricing," wondering "if market prices are really strong, then why do we not link our immediate shipments directly to the standard standards?".

He added: "It may happen that this mechanism will be changed when market conditions permit, not only in order not to incur losses, but in order to achieve better profits."

Al-Shatri stressed that "Iraq is currently using the official selling prices as a basis because it wants to measure the interest and pricing of crude oil."

He continued, "For the time being, we are keeping this tool (the link with benchmark oil prices) not for the sake of selling at a better price, but for the possibility of using it as a sensor for benchmark oil prices," noting that "with the current rapid changes and fluctuations in the market, we will need a sensor to tell us about performance of official oil prices.

Iraq, the second largest oil producer in the Organization of Petroleum Exporting Countries, usually issues a monthly tender for spot goods, which are usually sold at a higher price or at a discount to the official selling prices.