The second split: Basrah Medium and the challenge of Iraqi crude quality
In November 2020, ahead of annual term contract negotiations, Iraq’s State Oil Marketing Organisation (SOMO) announced it would further split its crude streams from two into three by launching a new export grade: Basrah Medium.
Having been launched in January 2021, what were the key drivers behind the move? What are the implications of the move for International Oil Companies (IOCs) who regularly lift Iraqi crude? How has the new grade been priced? This Comment provides a snapshot into the opaque world of Iraqi crude marketing and the key strategic challenges – and choices – ahead for OPEC’s second largest producer.