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By Tsvetana Paraskova - Aug 21, 2017, 12:00 PM CDT

In a bid to increase oil revenues and possibly setting the stage for its own benchmark crude grade, Iraq has told customers it may change the way it prices Basra crude for the Asian market, Reuters reported on Monday, quoting a letter by Iraqs state oil marketing company SOMO it had seen.

According to SOMOs letter, the company is asking customers for input regarding a plan to change the Basra crude pricing for Asia to Dubai Mercantile Exchange (DME) Oman futures beginning next year, dropping the average of Oman and Dubai quotes by S&P Global Platts.

In an effort to realize the intrinsic value of our crude exports to Asia as to be in alignment with the recent market perception, we are contemplating a change of the current pricing formula for the Asian market, Reuters quoted SOMOs letter as saying. The letter is dated August 20 and asks for feedback from customers by August 31.

If implemented, the change would concern the pricing of around 2 million bpd of Iraqs exports to Asia, nearly two-thirds of the daily Iraqi exports from the southern port of Basra.

While it is planning a possible pricing change for Asia, Iraq is not expected to alter the pricing to Europe and the U.S. in which it uses the Dated Brent and the Argus Sour Crude Index (ASCI), respectively. Related:Qatar Aims To Ease Its Reliance On LNG Exports

The Iraqi plan is also seen as a breakaway move from the leading Middle Eastern exporter, Saudi Arabia, whose official selling prices (OSP)using S&P price assessments for decades--are usually followed by the other main producers in the region.

Middle Eastern crude benchmarks currently dont include Iraqi crude grades, and this could be one of the reasons for Iraq studying a change.

The Iraqis probably want to get in on the game of being a benchmark grade, a Singapore-based oil trader told Reuters.

By Tsvetana Paraskova for Oilprice.com

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In Breakaway Move From Saudis, Iraq May Change Oil Pricing - OilPrice.com

Some of the best news to come from the Middle East in a long time is the recent and long-overdue improvement in relations between Iraq and Saudi Arabia. It started in February, when Saudi foreign minister Adel al-Jubeir visited Baghdadthe first such visit since 1990and continued with a number of subsequent contacts, including a meeting between Iraqi Interior Minister Qasim al-Araji and Saudi Crown Prince Mohammed bin Salman (MBS) on July 19. Most striking of all was when Iraqs Shiite firebrand cleric, Muqtada al-Sadr, traveled to Riyadh for high level talks on improving bilateral ties with the Saudis on July 31.

As an Iraqi leader, Sadr has typically taken a hard nationalistand sometimes even Shiite chauvinistline. And although his relationship with Tehran is complicated owing to his independent power base and occasional appeal to a sense of Iraqi patriotism, he has been a critical Iranian ally for most of the post-Saddam Hussein era. His militia, Saraya al-Salam, continues to receive extensive support from Irans Revolutionary Guard. For all those reasons, his meeting with the Saudis, Irans traditional Arab Sunni nemesis, was a surprise, to say the least.

Although still at an early stage, these meetings have raised the possibility of Saudi willingness to support war-ravaged Iraq, ease commerce and communications between the two countries, and re-open the massive pipelines that run through the Kingdom from Iraq to the Red Seabuilt during the Iran-Iraq War but closed after Saddams 1990 invasion of Kuwait. They also raise the prospect of meaningful Sunni political participation in post-ISIS Iraq.

From the perspective of the United States (and Iraq), this can only be good news. Washington has been trying in vain since 2003 to convince the Saudis and other Gulf states that they have a vital role to play in Iraqs stability and geopolitical realignment, and that dissing the Iraqis would simply drive the countrys Shiites into the arms of the Iranians and its Sunnis into the arms of terrorist

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How Saudi Arabia Is Stepping Up in Iraq - Foreign Affairs

Iraqi security forces launched on Sunday an offensive to take back the city of Tal Afar, their next objective in the U.S.-backed campaign to defeat Islamic State militants, Prime Minister Haider al-Abadi said.

"You either surrender, or die," Abadi said in a televised speech announcing the offensive, addressing the militants.

A longtime stronghold of hardline Sunni insurgents, Tal Afar, 50 miles (80 km) west of Mosul, was cut off from the rest of the Islamic State-held territory in June.

The city is surrounded by Iraqi government troops and Shi'ite volunteers in the south, and Kurdish Peshmerga fighters in the north.

About 2,000 battle-hardened militants remain in the city, according to U.S. and Iraqi military commanders.

They are expected to put up a tough fight, even though intelligence from inside the city indicates they have been exhausted by months of combat, aerial bombardments, and by the lack of fresh supplies.

Hours before Abadi's announcement, the Iraqi air force dropped leaflets over the city telling the population to take their precautions. "Prepare yourself, the battle is imminent and the victory is coming, God willing," they read.

Islamic State's self-proclaimed "caliphate" effectively collapsed last month, when U.S.-backed Iraqi forces completed the takeover of the militants' capital in Iraq, Mosul, after a nine-month campaign.

But parts of Iraq and Syria remain under its control, including Tal Afar, a city with a pre-war population of about 200,000.

Tal Afar experienced cycles of sectarian violence between Sunnis and Shi'ites after the U.S.-led invasion of Iraq in 2003, and has produced some of Islamic State's most senior commanders.

Waves of civilians have fled the city and surrounding villages under cover of darkness over the past weeks, although several thousand are estimated to remain, threatened with death by the militants who have held a tight grip there since 2014.

Residents who left Tal Afar last week told Reuters the militants looked exhausted.

"(Fighters) have been using tunnels to move from place to place to avoid air strikes," said 60-year-old Haj Mahmoud, a retired teacher. "Their faces looked desperate and broken."

The main forces taking part in the offensive are the Iraqi army, Federal Police and the elite U.S.-trained Counter-Terrorism Service (CTS), Iraqi commanders told Reuters.

Shi'ite Popular Mobilization Forces (PMF), some of which are trained and armed by Iran, said they will also take part in the battle. Their involvement is likely to worry Turkey, which claims an affinity with the area's predominantly ethnic Turkmen population.

The U.S.-led coalition said over the past days it had carried out dozens of air strikes on Tal Afar, targeting weapons depots and command centers, in preparation for the ground assault.

"Intelligence gathered shows clearly that the remaining fighters are mainly foreign and Arab nationals with their families and that means they will fight until the last breath," Colonel Kareem al-Lami, from the Iraqi army's 9th Division, told Reuters earlier this week.

But Lami said Tal Afar's open terrain and wide streets will allow tanks and armored vehicles easy passage. Only one part of Tal Afar, Sarai, is comparable to Mosul's Old City, where Iraqi troops were forced to advance on foot through narrow streets moving house-to-house in a battle that resulted in the near total destruction of the historic district.

The United Nation's International Organization for Migration (IOM), estimates that about 10,000 to 40,000 people are left in Tal Afar and surrounding villages. Aid groups say they are not expecting a huge civilian exodus as most the city's former residents have already left.

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Iraq starts offensive to take back Tal Afar from Islamic State - CNBC

Smoke rises after an air strike during fighting between members of the Syrian Democratic Forces and Islamic State militants in Raqqa, Syria, 20 August 2017 (Reuters)

The high civilian death toll from US-led airstrikes in Syria despite strict warnings from the United Nations is rooted in Washingtons lack of respect for international and humanitarian law, a London-based expert says.

Catherine Shakdam told Press TV that the manipulative approach is meant to cover up the atrocities committed by the US army so that it will not be held accountable for its war crimes.

Washington has never really abided by international law. Not caring how many people will die no matter [whether] its in Iraq or Syria or anywhere else, the US continues to target what it wants whenever it gets to.

She said "manipulation of numbers and truth" is a way of life for the US Army, adding Washington does all it can to portray its actions as justifiable and therefore holding it accountable for its atrocities can be problematic.

The US-led coalition has acknowledged that its air raids against purported Daesh positions inside Syria and Iraq have killed at least 600 civilians since June 2014. The figure, however, is much lower than the death toll documented by independent groups.

The military alliance has repeatedly been accused of targeting and killing civilians. It has also been largely incapable of fulfilling its declared aim of destroying Daesh.

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'US Army covering up crimes in Syria, Iraq' - Press TV

ABU GHADDUR, Iraq U.S.-backed Iraqi forces on Sunday launched a multi-pronged assault to retake the town of Tal Afar, west of Mosul, marking the next phase in the countrys war on the Islamic State group.

Tal Afar and the surrounding area is one of the last pockets of IS-held territory in Iraq after victory was declared in July in Mosul, the countrys second-largest city. The town, about 150 kilometers (93 miles) east of the Syrian border, sits along a major road that was once a key IS supply route.

The city of Tal Afar will be liberated and will join all the liberated cities, Prime Minister Haider al-Abadi said in a televised speech early Sunday. He was dressed in a black uniform of the type worn by Iraqi special forces.

He called on the militants to surrender or die.

By early afternoon, Lt. Gen. Abdul-Amir Rasheed Yar Allah, who commands the operation, said the forces had recaptured a series of villages east, southwest and northwest of town.

The U.S.-led coalition providing air and other support to the troops praised what it said was a capable, formidable, and increasingly professional force.

They are well prepared to deliver another defeat to IS in Tal Afar, like in Mosul, the coalition said in a statement.

On the front lines, pillars of smoke could be seen rising in the distance as U.S. and Belgian special forces worked with Iraqi troops to establish a position on the roof of a house. They later fired mortar rounds and launched drones.

Lt. Gen. Riyad Jalal Tawfiq, of the Iraqi army, said IS had deployed small teams of attackers as well as suicide car bombs and roadside bombs.

The Coalition estimates that approximately 10,000-50,000 civilians remain in and around Tal Afar. In past battles, IS has prevented civilians from fleeing and used them as human shields, slowing Iraqi advances.

Hours after announcing the operation, the United Nations expressed concerns over the safety of the civilians, calling on warring parties to protect them.

Iraqi authorities have set up a toll-free number and a radio station to help guide fleeing civilians to safety.

A stepped up campaign of airstrikes and a troop buildup has already forced tens of thousands to flee Tal Afar, threatening to compound a humanitarian crisis sparked by the Mosul operation.

Some 49,000 people have fled the Tal Afar district since April, according to the United Nations. Nearly a million people remain displaced by the nine-month campaign to retake Mosul.

The U.N. Humanitarian Coordinator for Iraq, Lise Grande, described the situation inside Tal Afar as very tough, with food and water running out and many lacking basic necessities.

Families are trekking for 10 to 20 hours in extreme heat to reach mustering points, she said. They are arriving exhausted and dehydrated.

Iraqi forces have driven IS from most of the major towns and cities seized by the militants in the summer of 2014, including Mosul, which was retaken after a grueling nine-month campaign.

But along with Tal Afar, the militants are still fully in control of the northern town of Hawija as well as Qaim, Rawa and Ana, in western Iraq near the Syrian border.

Tal Afar has been a stronghold for extremists in Iraq since the 2003 U.S.-led invasion that toppled Saddam Hussein. Many senior leaders of IS and its predecessor, al-Qaida in Iraq, were from Tal Afar.

Iraqs state-sanctioned and mostly Shiite militias largely stayed out of the operation to retake Mosul, a mostly Sunni city about 80 kilometers (50 miles) to the east, but have vowed to play a bigger role in the battle for Tal Afar, which was home to both Sunnis and Shiites, as well as ethnic Turkmen, before it fell to IS, a Sunni extremist group. The militias captured Tal Afars airport, on the outskirts of the town, last year.

Their participation in the coming offensive could heighten sectarian and regional tensions. The towns ethnic Turkmen community maintained close ties to neighboring Turkey. Turkish officials have expressed concern that once territory is liberated from IS, Iraqi Kurdish or Shiite forces may push out Sunni Arabs or ethnic Turkmen.

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Iraq launches operation to take back IS-held town near Mosul - The Denver Post