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[SNSUC Crude Watch] Nov Basrah Medium -$2.80 / Heavy -$5.80 OSP cut; Hormuz risk premium holds Brent elevated
Iraq's SOMO set November Asian OSP: Basrah Medium at -$2.80 and Heavy at -$5.80 vs benchmark, sharply deeper than October to defend share; with Hormuz war-risk premia (hull 6%–10%, up to $20M附加 per VLCC) and strait flows at 68%–76% of pre-conflict, Brent holds near last week's highs. Chinese independents have locked 12–15 mb of Basrah Medium/Heavy and Al-Shaheen for Oct–Nov to replace lost Iranian volumes.
2026-10-20· 5 min· By: SNSUC Research Institute
I. Three-layer pricing
1. Per SOMO's Oct 8 price list, November Asian Basrah Medium is set at a discount to benchmark (flat in Oct) and Heavy at a wider discount (Oct -3.30). The cut follows Saudi Aramco's Nov Arab Light cut to -$5.00 to defend share, as Iraq trades volume for price at elevated levels. (Source: SOMO / China Energy News / Caixin-clone)
2. Sep 29 filings show Oct-loading term discounts deepened versus prior months, reflecting geoprisk and tight-fleet incentives to buyers.
3. Loading premium +30% mechanism. Non-Hormuz liftings (Oman STS / Fujairah) carry delivered premia above Dubai; recent tender premiums varied by timing and delivery mode. Anchoring Brent front-month at ~$108.8: Basrah Medium OSP table price ≈ $106.0; after term discount FOB net is significantly reduced (Medium discounted to Oman/Dubai, freight + war-risk hedged). Heavy OSP ≈ $103.0; post-discount FOB net is significantly reduced. Effective net-to-hand is materially lifted by war-risk premia (up to $10–20M附加 per VLCC, hull 6%–10%) and STS transfer cost.
III. Hormuz remains RESTRICTED: on Oct 13 UKMTO confirmed projectile strikes on a tanker and a boxship; passage through the strait is constrained, with some flows rerouted via pipeline / STS. Lloyd's JWC lists the whole Gulf as high-risk, war-risk premia punitive. Chinese independents have locked 12–15 mb of Basrah Medium/Heavy and Al-Shaheen for Oct–Nov to replace Iranian volumes (Region Alert). Buyers must price war-risk and demurrage into delivered cost and prefer Oman-STS delivery to avoid in-strait exposure.
