Oil Minister explains the mechanics of Iraqi crude calculation 3/10/2016
Oil Minister explains the mechanics of Iraqi crude calculation
3/10/2016 0 Comments
Oil Minister Adel Abdul-Mahdi said Iraq sells oil, similar to countries producing and exporting crude oil in the region, according to well-known and followed for decades rules .. There are generally several mechanisms for sale, but the most important and most frequently used are two mechanisms for sale .. The first so-called direct selling Spot market and the second sales contracts Term contract .. and Iraq sells, according to the second rule, and the reason is clear: to deal with serious and steadfast customers, it was in response to a lot of discussions and interpretations in the media about the prices they sell out Iraq's oil .. Some say that Iraq give certain discounts, or it sells for less than market rates, and cast figures have nothing to do with reality, but is inaccurate assumptions, their own.
He said Iraq's clientele consists of major discreet international companies that deal in oil markets, and is generally contracting with companies that do not have or are related to refineries unknown accept .. and all this to protect the markets of Iraq and to get away from the daily speculation. It depends list of buyers who own refineries in the world, and be contracts are generally for a particular stretch where contractors booked their shares for a year, or even for 10 years .. and determines prices according destined for him the market price of the consignment on the day of loading patched pricing company "Iraqi Marketing" OSP.
Pointing out that the suspicion, which is located by some in terms of price, speaks about Iraq sells less than world prices, or give discounts, is that he listens to the news and is advertised price in the releases is the price that must be the country earns source .. In so many mistakes, the most important .. The bulletins prices are the prices signal or the rates and are not final sale price .. then each special price area .. and Iraq supports three markets, namely the East and Europe and the Americas, and the oils prices vary from one quality to another, according to degrees of density API and Ahamodah factors, competitive, and carry some transport fares, and other factors, make up the price difference for the reference oil on the market.
He said the Iraqi pricing based on global prices, the rate of crudes foundation or crudes reference Benchmark price which is "Brent Dated" for the European market, or "ASCI" market of the Americas, or the rate of "OMAN + DUBAI-2" for the price of Middle .. These oils, it is connected by crudes region or the market that resemble some of them of Iraqi crude oil, and thus rely in determining the price of Iraqi oil, up or down, depending on the quality of Iraqi oil and other conditions.
In the first ten days of each month to meet the "Committee pricing", headed by the oil minister in the ministry's marketing company, is studying the global market data, and all the indicators and factors present and future in accordance with the global program are working with all the big companies to examine the qualitative difference between the oil-signal and oil similar in the market in question, as well as other competitive aspects. The Commission up to the final decision to the official rate declared (OSP) next month in the three markets, but the two types of oil Basra "heavy" and "light", and for different ports, oil of Kirkuk crude through "Jihan" which of its businesses and be the foundation for accountable for the month in question and the market in question .. There is no contract with each shipment .. but price determines according day download monthly average or five bulletins prices, rate and transport fares to European markets and the US and qualitative difference to the technical specifications, and did not get so far, according to the data, a difference of one day in the pricing of oil as far as this issue.
Finally, the oil minister saying that Iraq had sold in February last oil in all markets, and the various qualities, and all outlets, for example, a rate of $ 23.729 / barrel, while the price of the three market rate (Asia, Europe, America), is $ 29.898 / barrel, a difference of $ 6 / barrel, almost, which is very close to an increase or a decrease, the rates of the Gulf states and Iran, and this mechanism is established by all exporting countries.