1. Three-layer pricing framework

Delivered cost of Basrah crude to China comprises three layers: ① OSP list price (SOMO official, discounted to Oman/Dubai avg); ② spot discount (term rebate, floating with shipping risk; reference band Medium $25–29.80, Heavy $27.80–29.80/bbl, data updating); ③ loading premium (non-Hormuz loadings 1–10th ≥$0.20, 11–30th ≥$3.00/bbl; offshore STS transfer adds +30% mechanism).

2. October OSP: discounts sharply narrowed

SOMO set Oct (loading 10/1–10/31) Asia OSP: Basrah Medium at +$0.00 parity to Oman/Dubai avg (vs -$4.00 in Sept, tightened $4.00); Heavy discount narrowed to -$3.30/bbl (vs -$7.30 in Sept, tightened $4.00). Europe Medium -$4.85 to Dated Brent; N/S America +$4.10 to ASCI. The tightening reflects recovering Gulf exports via bypass routes in Sept and improved SOMO pricing power.

3. Net-to-hand discount estimate

With Brent≈$107.9/bbl and Oman/Dubai avg ≈$105–106: Medium FOB list ≈ benchmark +$0.00; after spot discount and freight/war-risk insurance premium, effective net-to-hand discount is about -$29 to -$34/bbl (FOB net ≈$72–77/bbl, floating with benchmark and rebate). Heavy, with deeper OSP and thicker rebate, carries a more favorable net.

4. Geopolitics & practical notes

Hormuz proper transits remain only ~3% of prewar (~3/d vs ~97/d prewar, IMF PortWatch); three tankers were struck on 9/30–10/1 and war-risk premiums stay elevated. Yet Gulf exports including bypass routes (Fujairah STS, Saudi East-West pipeline via Yanbu) recovered to ~16.3 mb/d in Sept (Kpler/Reuters 9/30, highest since the war began, ~5/6 of prewar). Chinese refiners (Rongsheng, Shenghong, CNPC) keep securing Basrah volumes amid tight supply. Buyers should fully price STS +30% and war risk into CIF/CFR offers, and lock on a two-factor OSP-list + rebate basis.

Sources: SOMO official OSP circular, Jin10/FX678, Argus/chemicalsupdates, Kpler/Reuters, IMF PortWatch (compiled 2026-10-01; some spot-rebate bands data-updating, subject to latest).