WAF to fill the Suez shortfall.
Saudi cancels October deliveries to Europe due to damage to the East/West pipeline
After exhausting North Sea grade options namely Johan Sverdrup, European refiners should be leaning heavily on WAF grades for replacement along with grades from Mexico and Guyana.
These replacement grades will likely not land until late October / early November
Medium grades from EC Mexico and Guyana also work well into USAC, while WAF grades price better into NWE. Due to volumetric requirements, USAC refiners will likely need to move quickly to secure cargos.
Landed WTI is the cheapest of the BFOETM grades for late October delivery windows. However, WTI has the lowest complex margin of the group, likely due to relatively low middle distillate yield.
Between Afra availability and relatively low landing value we should continue to see a steady stream of WTI headed to Europe.
We are looking for a good entry point (and liquidity) to go long November, December, and Q1 27 Mars basis.
(Best Medium Grades for Complex Refiners in NWE)
About the Author
Aaron Kildow | Crude Commodity Owner, Sparta Commodities
Aaron is Sparta’s Commodity Owner for crude, covering physical and financial oil markets, hedging structures, and customised oil balances. He co-founded The Oil Balance and spent over a decade at Macquarie Group building supply/demand models for Cushing, PADD 1, and PADD 3, with earlier trading and derivatives roles at CHS, Musket Corp., and Prudential Financial.
Connect: LinkedIn
About Sparta
Sparta is the AI leader for commodity trading, home to Leonidas AI, the first decision-making engine for oil and commodity traders. Backed by USD 42 million in Series B funding led by One Peak, with participation from returning investors FirstMark and Singular, the same investors behind AI leaders like Legora, Dataiku, and Synthesia. From independents to multinationals, the world’s leading commodity teams use Sparta and Leonidas AI to move faster, trade smarter, and stay ahead of the market.
For more information, visit Sparta or follow us on LinkedIn.
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