Asian buyers diversify from the Middle East, WTI still the cheapest arb crude globally

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Published15 APR 26 - 09:15 Reading time minutes

‘- Dubai market has been very subdued, reflecting poorer liquidity. Murban is now at June Dubai+13$/bbl compared to a high of +50$/bbl in last month trading. Increasingly more AG grades are traded on Dated or ICE Brent basis, noted from IOC’s recent tender.

– Japanese and Korean buyers are snapping up WTI very early in the trading window compared to previous months. WTI remains the cheapest arb crude into the Far East, albeit the gap has narrowed significantly with Murban prices easing off.

– China has not touched WTI (which still has the 10% tariff) and prefer to load up on Brazillian and Guyanan crude instead. They have been allocated less than half of their Saudi volumes for May, perhaps indicating diversification from the troubled Middle East with Yanbu loadings still at risk from any attacks from the Houthis.

– India is absorbing as much Iranian crude as they can, before the Iranian oil waiver expires this weekend. Russian crude is also very much in their base diet now, albeit at significantly higher premiums vs pre-crisis.

– In Europe, the physical tightness is evident, with Forties at FOB Dated+22$/bbl, and crushing European cracking margins. WTI by far remains the cheapest arb crude into NWE.

– Rumours of a 200 kbd CDU shutdown in Pernis due to economic reasons looks to be unfounded for now, as the unit was facing an unplanned maintenance but heard to be back up again.