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Middle East Oil at Fever Pitch

Middle East Oil at Fever Pitch Middle East Oil at Fever Pitch

Oil refiners across Asia are bidding up crude prices from Abu Dhabi to Oman as they compete for supplies to make up for lost Iranian and Venezuelan exports.
July-loading cargoes of grades such as Murban and Das were bid at premiums of $0.80 to $0.85 per barrel above the official selling price on Friday, Bloomberg reported.
That would be the highest spot differentials in at least three years for the grades. Upper Zakum crude was also bid at a $0.65 premium, while Umm Lulu changed hands at a $0.95 premium. The higher bids came even after Abu Dhabi National Oil hiked the official price of its crude earlier this week.
Buyers across the world’s top oil-importing region are scrambling for oil as US sanctions on Iran and Venezuela tighten supplies of high-sulfur crude that their refineries are designed to process. Unplanned disruptions to Russian and Nigerian flows and concerns that fighting in Libya could affect oil exports also contributed to the fervor to secure cargoes.
Oman crude futures climbed to a premium of $3.10 per barrel over swaps for Dubai oil, the benchmark grade for the Middle East. That is its highest premium since September, when markets were spooked by the prospect of US sanctions putting an end to Iranian exports.
A wide discount between the Dubai benchmark and Brent, the marker for more than half the world’s oil supplies, is also contributing to the strong interest for Middle Eastern grades. Dubai’s discount to Brent futures was more than $3 per barrel on Friday, near the highest level in seven months.

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