Middle East crude benchmarks Oman and Murban slipped on Friday amid worries about weaker demand from Asian refineries but an escalation of tensions in the Red Sea limited the falls.
As a result of the latest flare-up in the Middle East conflict, the market expects some westbound crude cargoes could be diverted to Asia to avoid the high-risk zones.
The United States and Britain launched strikes from the air and sea against Houthi military targets in Yemen in response to the movement’s attacks on ships in the Red Sea, a dramatic regional widening of the Israel-Hamas war in Gaza.
On Thursday, Iran seized a tanker with Iraqi crude destined for Turkey in retaliation for the confiscation last year of the same vessel and its oil by the U.S., Iranian state media reported, a move likely to stoke regional tensions.
“Asian refiners would be cautious to take crude such as Iraqi and CPC Blend at this moment. No one wants to be the next one whose cargo being seized by Iran,” said one Singapore-based oil trader.
Subdued trade in Iraqi crude was partly because the market is waiting for the country’s state oil company SOMO to disclose its February official selling prices (OSPs).
The market was also focused on an unplanned outage at ThaiOil’s 275,000 barrels-per-day Sriracha refinery, a regular buyer of Mideast light crude. But it is not immediately clear if the affected crude distillation unit has been shut down.
In spot tenders, Vietnam’s PV Oil issued tenders to sell one March-loading Chim Sao crude cargo and three Su Tu Den crude cargoes. The tender closed on Friday and will be valid until Monday and Wednesday, respectively.
CHINA DATA
China’s annual crude oil imports hit an all-time high in 2023, customs data showed on Friday, as fuel demand recovered from a pandemic-induced slump despite economic headwinds.
SINGAPORE CASH DEALS
Cash Dubai’s premium to swaps fell 15 cents to $0.98 per barrel.
PRICES ($/BBL)
NEWS
Indonesia’s 2023 oil lifting stood at 605,500 barrels per day (bpd) while natural gas lifting stood at 5,378 million standard cubic feet per day (mmscfd), upstream oil and gas regulator SKK Migas said on Friday.
Oil loadings from the port of Aktau to the Baku-Tbilisi-Ceyhan pipeline increased by 5.5 times to 1.392 million metric tons in 2023, Kazakhstan’s Kaztransoil said on Friday.
Global oil demand is expected to increase by almost 2 million barrels a day in 2024, with China accounting for more than 25% of the increase, consultancy Wood Mackenzie said in a report on Thursday.
For crude prices, oil product cracks and refining margins, please click on the RICs below.
Source: Reuters (Reporting by Muyu Xu; editing by Jane Merriman)