SINGAPORE: Middle East oil benchmarks Dubai and DME Oman have
nudged above prices for Brent crude, an unusual move as US
sanctions on Venezuela and Iran along with output cuts by OPEC
tighten supply of medium to heavy sour oil.
Sour crudes, mainly produced in the Middle East, Canada and Latin
America, have a high sulfur content and are usually cheaper than
Brent, the benchmark for low-sulfur oil in the Atlantic Basin.
But Dubai spot prices and DME Oman crude futures for April have
held above ICE Brent at Asia’s market close since the start of
February, data from the Intercontinental Exchange (ICE), Dubai
Mercantile Exchange and Refinitiv Eikon showed.
“The forceful implementation of US sanctions on Venezuelan crude
exports, the greater-than-expected recent Saudi crude output cut
… and the uncertainty over US sanction exemptions on Iranian
crude have all served to strengthen sour crudes relative to sweet
benchmarks such as Brent,” said Tilak Doshi, a Singapore-based
analyst at consultancy Muse, Stancil & Co.
US sanctions on Venezuela created a strong pull for medium and
heavy sour crude from other places, said the traders and
The sanctions, aimed at blocking Venezuelan President Nicolas
Maduro’s access to the nation’s oil revenue, will be extended
to non-US oil buyers from April 28.
Uncertainty over whether Washington will extend waivers to
sanctions on Tehran’s oil exports that it previously granted to
top Iranian crude buyers — China, India, Japan and South Korea
— is also boosting Middle East oil prices.
A decision by OPEC and Russia to rein in oil output has buoyed sour
crude prices as well.
Venezuela: US sanctions threaten heavy crude suppliesUS sanctions
threaten Venezuela’s economy as Maduro eyes next move
Source: FS – All-News-Economy
Sanctions and cuts push sour crude prices above Brent