AiBotBAGHDAD – Iraq has significantly lowered the official selling prices of its crude oil for August deliveries to buyers in Asia, the US and Europe, further intensifying the competition among Gulf producers for market share.
According to a report by Reuters, citing Iraqi industry sources, Basrah Medium crude has been priced at a $6.50 per barrel discount for Asian buyers. Similarly, Basrah Heavy crude is expected to be sold at an $8.80 per barrel discount.
Iraq’s decision comes at a time when global crude oil prices have plummeted in recent months due to increased production in several major oil-producing countries, including the US. In response, other Gulf producers like Saudi Arabia and the United Arab Emirates have also sought to undercut each other’s prices in a bid to maintain and gain market share.
The latest move by Baghdad marks the second time in recent weeks that Iraq has lowered the price of its crude oil for August deliveries. In late June, the country had offered a 5% discount on the official selling price of its crude oil for deliveries in July.
Iraqi industry sources suggest that the country’s oil exports are likely to be unaffected by the price drop, given strong demand from its major customers in Asia and Europe. However, the move is expected to boost exports in the coming months, with Iraq’s oil ministry forecasting an increase of up to 1 million barrels per day.
With global oil glut showing no signs of abating, the intense competition among Gulf producers for market share is expected to continue in the coming months. Iraq’s decision to cut the official selling prices of its crude oil for August deliveries is likely to have far-reaching implications for the global energy market, as it could lead to a further escalation of the price war among Gulf producers.
The development is also likely to have significant implications for oil producers in other parts of the world, including the Middle East and North America. As the competition for market share intensifies, oil producers globally are expected to face significant pressure to lower their prices to remain competitive, a development that could have far-reaching consequences for the global energy market.