Iraq follows Saudi Arabia’s lead with Asian crude price hike

(Bloomberg) --Iraq raised pricing for all crude sales to Asia for February, after a similar move by Saudi Arabia, OPEC’s biggest producer.

The second-largest OPEC member, Iraq increased Basrah Light crude to buyers in Asia by 70 cents a barrel, to a $1.10 premium over the regional benchmark, according to a price list from the state oil marketer.

Crude markets are tightening after Saudi Arabia announced last week it will make a unilateral 1 million barrel-a-day production cut in February and March. Saudi Arabia also raised its pricing for February crude sales to Asia. The planned Saudi reduction in output drove Brent crude to more than $55 a barrel last week, up 8% so far this year.

The Organization of Petroleum Exporting Countries and its allies agreed last week to keep production unchanged for most members as their coalition seeks to keep output restrained amid slack demand and coronavirus shutdowns. While Russia and Kazakhstan will be able to pump slightly more, their increases will be outweighed by the Saudi production cut.

Iraq also raised prices for its Basrah Medium and Basrah Heavy grades to Asia. It increased February pricing for Light and Medium barrels to the U.S. and kept Basrah Heavy to the U.S. unchanged. Shipments to America of Kirkuk crude from northern Iraq will cost less. Baghdad is cutting all pricing to Europe by at least 80 cents a barrel.