Iraq's State Oil Marketing Organization, or SOMO, said Tuesday a sharp jump in its planned exports of Basrah crude oil in October was largely due to operational issues.

Iraq plans to export 113.96 million barrels, or 3.676 million b/d, of crude in October, all from the southern Gulf terminals.

This represented a surge of 23.5 million barrels (757,000 b/d) from the September schedule of 90.5 million barrels (3.017 million b/d).

"The difference between the allocated volume and the projected exportable volume in October was made for operational and logistical purposes only," SOMO said in an emailed statement.

Spot differentials for Middle East medium sour grades came under heavy pressure as trading for November-loading cargoes kicked off this week after news of the surge in Iraq's exports in October.

Discounts for November-loading cargoes of Qatar's Al Shaheen plunged to as low as $2.80-$2.90/b below front-month Dubai assessments as traders factored in a worsening supply glut in Asia because of the rise in Iraq's exports.

The southern export program surprised traders as it was 640,000 b/d higher than the actual average exports over the last three months, 3.036 million b/d. Exports are expected to be around 3 million b/d in September.

Iraq's SOMO has previously nominated more than 10% above export capacity to account for lifting delays and cancellations and to ensure the loading jetties are continually occupied. This is balanced against the risk of long queues of waiting tankers and having to pay higher demurrage costs.

The export volume includes 86.16 million b/d (2.779 million b/d) of Basrah Light crude to be exported from the Basra and Khor al-Amaya sea terminals and one of the offshore moorings.

From that volume, 35 million barrels (1.129 million b/d) will be lifted by international oil company contractors as payback oil for their dues.

The remaining 51.16 million barrels (1.65 million b/d has been allocated for term buyers. Some 27.8 million barrels (897,000 b/d) of Basrah Heavy crude, which makes up the rest of the exported crude, will be loaded from the two other offshore moorings.

From this, the oil companies have been allocated 27 million barrels (871,000 b/d) as payback payments and the remaining 800,000 barrels for term buyers.