1. OSP official formula prices
SOMO set the December-loading Asia OSP: Basra medium-sour reference (currently the Basra Light sulphur benchmark ahead of the split) at a +$0.45/bbl premium to the Oman/Dubai average, up 15¢ from November; Basra Heavy at a -$0.95/bbl discount to Oman/Dubai, narrowing 10¢ (i.e. tighter) month-on-month. Both grades were tightened, reflecting SOMO's rebalancing between market share and differentials.
SOMO also announced it will launch a standalone 'Basra Medium' grade in January 2027, splitting current Basra Light into Light (~33°API) and Medium (~29°API, akin to Qatar's Al-Shaheen). Until the new grade goes live, the December medium-sour reference remains the Basra Light +$0.45.
2. Spot term discount
Recent loading cargoes keep deep term discounts: medium-sour reference around -34.50, heavy around -37.00 USD/bbl FOB (deeper than pre-war) to hedge freight and war risk. Offshore STS transfer adds a loading premium by layday: ≥$0.20 for days 1–10, ≥$3.00 for days 11–30.
3. Net-back differential
Medium net ≈ Oman/Dubai +0.45 − 34.50 ≈ -34.05 USD/bbl FOB; heavy ≈ −0.95 − 37.00 ≈ -37.95. Delivered, this equates to roughly +$12–20/bbl to ICE Brent.
4. Macro & geopolitics
The December contract settled Friday (10/30): Brent $114.88/bbl (-0.38%), WTI $102.00/bbl (-0.76%), as diplomacy hopes eased the risk premium. But Hormuz remains a live firing zone: the IRGC said three tankers hit mines and caught fire on an unauthorised route south of the strait over the past 24 hours; the Houthis claimed strikes on Saudi Arabia's Ras Tanura and Rabigh refineries and the Abqaiq facility; the US Vice President wrote to Iran to revive talks, with Qatar submitting a fresh draft. Public IEA data shows Gulf-to-Asia shipping cost above $37/bbl (~5× pre-war), and war-risk premiums hold at 6–10% of hull value (up to ~$20m additional cover per VLCC voyage).
Practical note: Chinese independent refiners keep locking Basra medium/heavy and Al-Shaheen for Oct–Dec to replace Iranian barrels; ahead of the January Medium launch, buyers should pin down the pricing-benchmark switch clause to avoid differential mismatches from the grade split.
