Crude Prices Surge in Europe as Asian Buying Tightens Market

tjhs70c12{vxt991dw3{(}})_media_dl_2.png Baltic ExchangeArticle content(Bloomberg) — Crude prices in Europe — which initially showed a muted reaction to the war in the Middle East — are now surging as aggressive buying by Asian refiners tightens the global market.Sign In or Create an AccountEmail AddressContinueor View more offersArticle contentUnlike their Asian peers, refineries in Europe have very limited direct exposure to Middle East crude. They mostly purchase local or US grades, and the European market has been well supplied. But a rush by Asian buyers to replace Middle Eastern barrels lost due to output halts and shipping disruptions in the Strait of Hormuz has tightened availability elsewhere, particularly in the Atlantic Basin.Article contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Article contentArticle contentTraders said the heavy buying has begun to ripple into Europe, where there’s increasing urgency among refiners to secure supplies. That’s being reflected by soaring differentials for Johan Sverdrup, a major North Sea grade and which is a good replacement for Middle East crude.Article contentTop StoriesGet the latest headlines, breaking news and columns.There was an error, please provide a valid email address.Sign UpBy signing up you consent to receive the above newsletter from Postmedia Network Inc.Thanks for signing up!A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Article contentThe grade was bid at a premium of $3.15 a barrel to Dated Brent on Thursday, according to traders monitoring a pricing window run by S&P Global Energy, better known as Platts. That’s the most in two years and compares with a discount of $3.25 before the war started last weekend. Article contentMediterranean grades have also rallied. Kazakhstan’s CPC Blend has jumped to a slight premium to Dated Brent for delivery to Augusta, compared with a discount of $3 to $4 late last week. Premiums for Azerbaijan’s Azeri Light also widened by more than $3 over the past few days. Article contentCompetition for crude will likely intensify further as Asian buyers prioritize securing feedstock over refining margins, Sparta Commodities analyst June Goh said in a March 5 note. Refineries in the region are expected to “grab whatever crude they can get their hands on” to replace Middle Eastern barrels, she said.Article contentArticle contentSouth Korean refiner GS Caltex Corp. and Japanese processors are among those to have bought either Kazakhstan’s CPC Blend or US crude recently.Article contentHow Iran War Is Disrupting Global Oil and Gas Supply: QuickTakeArticle contentWhile the crisis has sent the value of some grades soaring, not all Atlantic Basin supplies are selling strongly.

In West Africa, sales for April loading are looking slower than normal so far, according to traders in that market. High freight rates are a key reason, making it unattractive to ship cargoes to Asia, where many of the region’s biggest customers are located, traders said.Article content“Physical West of Suez crude is ripping in some parts, while still sluggish in others,” said Neil Crosby, head of research at Sparta. “Eventually we presume Europe and Asia will scoop up every and all available barrels if or when the consensus becomes that Hormuz just won’t reopen any time soon.”Article contentThe Middle East conflict will likely force Persian Gulf countries to halt energy exports and a prolonged blockage of the Strait of Hormuz may push oil to $150 a barrel in the next couple of weeks, the Financial Times reported Qatar’s energy minister as saying. Article contentBrent crude jumped above $91 on Friday to the highest in almost two years.Article contentTrending Beer, wine sales fall even more, putting tax revenues on the rocks, but one boozy drink is on the rise Retail & Marketing ‘As dead as fried chicken’: Why Trump finally fired Noem Economy CNRL says it will delay $8-billion mine expansion until carbon pricing rules are clear Oil & Gas These eight charts show 'rupture' with Canada under Trump's tariffs Economy Posthaste: Canadians are paying more than lip service to Buy Canada — and now the numbers prove it News Share this article in your social networkCommentsYou must be logged in to join the discussion or read more comments.Create an AccountSign in Join the Conversation Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information. Beer, wine sales fall even more, putting tax revenues on the rocks, but one boozy drink is on the rise Retail & Marketing ‘As dead as fried chicken’: Why Trump finally fired Noem Economy CNRL says it will delay $8-billion mine expansion until carbon pricing rules are clear Oil & Gas These eight charts show 'rupture' with Canada under Trump's tariffs Economy Posthaste: Canadians are paying more than lip service to Buy Canada — and now the numbers prove it News