Middle East crude benchmarks were little changed on Friday as traders awaited for more official selling prices from producers as well as Saudi Aramco’s allocation for March-loading oil.
The world’s largest exporter had hiked prices sharply with flagship Arab Light hitting a 15-month high.
While harsher sanctions on Russia and Iran are tightening supply for top importers China and India, Saudi’s price hike may deter some Asian refiners from requesting more oil as they grapple with low margins, traders said.
Margins at a complex refinery in Singapore is about $2 a barrel, after briefly touching negative last month.
RUSSIAN CRUDE
Freight rates for ESPO Blend crude shipped from the Russian port of Kozmino to China have fallen 50% in early February from mid-January levels as a shortage of tankers following U.S. sanctions on the fleet shipping Russian oil eased, four traders said.
As more “clean”, non-sanctioned, tankers have joined the ESPO market, freight rates have eased to levels of around $4 million to $5 million per route or less, they added.
The cost of transporting ESPO Blend from the port in the far east of Russia to terminals in northern China had jumped to $6 million to $7.5 million after the U.S. sanctions on January 10, as many vessels involved in shipping from Kozmino were targeted.
SINGAPORE CASH DEALS
Cash Dubai’s premium to swaps was unchanged at $3.45 a barrel.
NEWS
The U.S. Treasury said on Thursday it is imposing new sanctions on a few individuals and tankers helping to ship millions of barrels of Iranian crude oil per year to China, in an incremental move to boost pressure on Tehran.
Oil and gas traders are likely to seek waivers from Beijing over tariffs that the Chinese government plans to impose on U.S. crude and liquefied natural gas (LNG) imports from February 10, trade sources said on Thursday.
Oil executives called on Thursday for a return to navigation through the Red Sea en route to the Suez Canal following a halt in attacks by Iran-backed Houthi rebels, but said firms were cautiously monitoring shipping conditions and competitors.
Source: Reuters