UN discusses surcharge as Iraqi oil flows
Iraq appeared to have ended a 12-day export stoppage on December 13th as Moscow blocked an effort by the UN sanctions committee to publicly reprimand Baghdad for its demand that customers pay a 40-cents-per-barrel surcharge into an account outside UN control.
Committee members were expected to meet on December 14th for further discussions of the proposed statement, which would clear up confusion among buyers of Iraqi crude.
An Indian Oil Corp. (IOC) vessel had begun loading crude at the Gulf port of Mina al-Bakr early on December 13th after Baghdad reportedly dropped its request for the surcharge.
Iraqi crude customers had refused to pay the surcharge, which would mean a contravention of sanctions imposed on Iraq since its 1990 invasion of Kuwait.
Traders indicated that about eight other tankers were waiting at Mina al-Bakr, while no vessels have been seen near Ceyhan, the other approved Iraqi oil export route, which is not expected to resume loadings until December 19th.
Crude exports had been stopped since Baghdad pulled the plug late on November 30th due to disagreements with the UN and its crude customers over pricing.
Traders had balked at Iraqi state oil marketer SOMO’s request in November for a 50-cent premium to be paid into a direct account from December 1st.
The UN Security Council rejected Baghdad’s proposed December crude prices on November 27th on the grounds that they were below market value, presumably to accommodate the premium.
After several days of negotiations, the UN accepted December prices for Iraqi crude similar to those originally proposed by SOMO.
The new prices include incentives for customers and take into account the sharp decline in oil prices during the previous week. - (oilnavigator)