Record High US Crude Premiums: Implications for Investors and Businesses in Asia and Europe
سنغافورة: Spot premiums for US West Texas Intermediate (WTI) crude have surged to unprecedented levels as competition intensifies between Asian and European refiners. This scramble for supply arises from disruptions to Middle Eastern oil flows caused by the ongoing conflict in Iran, according to industry sources.
Historically, Europe has been the largest importer of US crude; however, Asian buyers are now aggressively seeking alternatives from the Americas, Africa, and Europe to offset limited Middle Eastern supplies that cannot transit through the Strait of Hormuz.
The escalation in crude prices is leading to increased operational costs and mounting losses for refiners across both continents. This situation exerts significant pressure on companies, especially state-owned enterprises that are mandated by their governments to maintain fuel production for national security purposes.
“Asian refiners, unable to access Middle Eastern supply, are bidding aggressively for every available barrel in the Atlantic Basin,” stated Paola Rodriguez-Masiu, chief oil analyst at Rystad Energy, in a report dated April 3.
Offers for WTI Midland crude, scheduled for delivery to North Asia in July using very large crude carriers, have seen premiums ranging from $30 to $40 per barrel, depending on the benchmark referenced, traders reported. One trader estimated the premium at $34 per barrel relative to Dubai quotes, while another cited a figure of $30 per barrel above dated Brent. Other traders noted offers nearing $40 per barrel based on an August ICE Brent reference.
These premiums represent a significant increase from the nearly $20 per barrel seen for transactions completed in late March and early April, which included purchases of WTI crude by Japanese refiners, such as Taiyo Oil.
“Every day presents a new price,” remarked one trader, indicating that Asian refiners are grappling with steep losses due to the rising premiums. Another trader suggested that refiners might be better served by reducing crude throughput and opting to purchase refined products—if available.
The spike in spot premiums followed the prompt monthly spread for WTI futures reaching its widest backwardation on Thursday, a situation where immediate prices exceed those of future months.
Moreover, wider price differentials for US crude oil compared to the global benchmark, Brent, have heightened demand for tankers from the US Gulf Coast. This increased demand is leading to reduced vessel availability in the region, consequently driving up freight rates.
In Europe, bids for WTI Midland delivered to the continent have reached a record premium, approaching $15 per barrel against dated Brent as of Thursday.
“At current physical differentials and freight rates, European refiners purchasing spot crude are unable to profit from processing those barrels through their systems,” Rodriguez-Masiu noted. — Reuters
تحليل خاص من عمانت | تصفح سوق عُمان
الارتفاع في US crude oil premiums signals significant shifts in the global oil market, driven by intensified competition among Asian and European refiners for alternative supplies. الشركات في عُمان should consider the rising cost pressures and potential supply chain disruptions, which could impact local refining operations amid a backdrop of geopolitical tensions. المستثمرون ورجال الأعمال الأذكياء should explore opportunities in قطاعات الطاقة البديلة and seek strategic partnerships, as traditional oil markets face volatility and evolving demands.
