U.N. Overseers Object To Latest Iraqi Request
The U.N. oil overseers opposed on December 18th an Iraqi request for an 80-cent-a-barrel cut in its crude prices for European markets during the latter part of December.
Baghdad had proposed on December 15th that prices to Europe for its Kirkuk grade be cut by 80 cents to Dated Brent minus $4.35 a barrel in an effort to resume exports at the Turkish port of Ceyhan.
Iraq argued that the current mechanism puts Iraqi crude prices at a disadvantage to rival Russian Urals grade, and also asked that prices of its Basrah Light crude be discounted to Europe at Dated Brent minus $5.55.
The oil overseers rejected the proposal, saying that recent price slides do not merit the cuts. The U.N. sanctions committee has until 2300 GMT on December 19th to object to the Iraqi request, after agreeing on December 15th to an amended U.S. proposal telling buyers not to pay any oil surcharges to Baghdad.
Moscow had blocked previous efforts to issue a statement to buyers, but the committee agreed to have U.N. oil experts send letters informing Iraqi crude customers that the U.N. has not authorized any surcharge, that payments for Iraqi oil must be made into an account under U.N. auspices and that buyers should not pay any surcharge.
The letters are in response to a renewed Iraqi request that customers pay a surcharge into an account outside U.N. control.
Buyers had earlier refused Iraq’s request, which would have meant a contravention of sanctions against the country, prompting Baghdad to halt exports late on November 30th. Loadings resumed on December 13th at the Gulf port of Mina al-Bakr, with oil currently flowing at a rate of about 1 million b/d through that export route.