1. Three-layer pricing

1. OSP layer. SOMO September Asia OSP: Basrah Medium at a discount of -$4.00/b to the Oman/Dubai average (Aug -$6.50, lifted $2.50); Basrah Heavy at -$7.30/b (Aug -$8.80, lifted $2.50). Iraq narrowed the discount (effectively a price hike) to steady official prices amid the Hormuz crisis, but kept the move modest.

2. Spot discount layer. August term basis: extra FOB discounts of $25–29.80 / $27.80–29.80 per barrel for Medium/Heavy. A new September discount mechanism (effective Sep 1, ~30% off the lower of SOMO price or budget price) sustains the deep cuts — the key driver of the net-to-hand price.

3. Loading premium layer. September tenders: +$0.20/b for 1–10 day loading, ≥ +$3.00/b for 11–30 day loading (offshore STS transfer); delivered cost adds ~30% transfer premium. Deep discount and transfer premium coexist, confirming a “high-risk, high-discount, but still attractive delivered-to-China” structure.

2. Net-to-hand differential

Netting OSP against spot discount, Basrah Medium lands FOB at roughly -$29 to -$34/b vs Oman/Dubai (Aug–Sep basis, net price ~$86.8–91.6/b depending on monthly average). Per AlphaBrief/Reuters September reporting, traders can earn ~$10/b resale margin after ~$17/b freight and insurance — a real observed trade structure.

3. Practical notes

① The Hormuz “7-day reopening” is a proposal only; credibility is questioned as Iran’s conditions are unchanged. Daily transit is just 2–3 vessels (vs ~125 pre-war), so differentials do not yet reflect full reopening. ② Chinese refiners have booked ≥16 million barrels of Basrah for September (Rongsheng ~half, Shenghong ~2 mn bbls at Brent+8), backfilling Saudi/ADNOC gaps at deep discounts. ③ Brent $104.32 is the Sep 25 settlement; the Sep 26 e-session broke below $98 on reopening hopes — watch weekend US–Iran talks. Sources: SOMO / Argus / chemicalsupdates / Sina / Xinhua / Kpler.