I. Three-layer pricing read

1. OSP list price. SOMO set its December OSP to Asia: Basrah Medium at a $0.35/bbl discount to the Oman/Dubai average (vs -$2.80 in November, tightened $2.45, an effective price hike); Basrah Heavy at a $3.10/bbl discount (vs -$5.80, tightened $2.70). This is a price increase that reverses November's Saudi-following cut and aligns with Saudi Aramco's December Asia hike of $1.10-2.80/bbl - signalling producers defending share while protecting margins at elevated Middle East benchmarks .

2. 2. Spot discount (term rebate). October-loading cargoes fetched FOB term rebates at a deeper level than August–September, reflecting a strong discount incentive for Gulf/tonnage risk. With December OSPs hiked, equivalent spot rebates should narrow, but buyers' net cost remains pressured by freight and war risk.

3. Load-premium +30% mechanism. The Sept file showed non-Hormuz load premiums of >=$0.20 (days 1-10) and >=$3.00 (days 11-30) per barrel, with offshore STS transfer (Fujairah anchorage) adding +30%. Under current Hormuz risk, STS has spilled onto India's west coast (Gujarat Gulf 79-82 vessel calls ~0.68 mb/d in Sept); freight plus war risk further lift delivered cost.

II. Using the Dec OSP Medium -0.35 as the list anchor, adding the FOB term rebate and freight/war risk, the delivered net discount to Oman/Dubai is substantially widened; Heavy follows a similar pattern. In other words, the nominally small OSP discount masks a large delivered-cost uplift from transit friction.

III. Practical notes

1) The December OSP hike signals stronger Iraqi list pricing, but deep spot equivalents and freight/war risk offset it - procurement should anchor on net delivered price, not OSP list.

2) Hormuz saw 7 vessels hit or mined in one night (IRGC Oct 22: 4 laden tankers directly struck and fired, 3 mined and disabled) - the worst single-day toll since the Feb 28 outbreak. Hull war-risk premiums have risen sharply versus pre-conflict levels; a single VLCC voyage add-on is now material, and total transit cost represents a significant portion of Brent value. Claims about strait volumes exceeding pre-war levels lack publicly verifiable corroboration.