Middle Eastern benchmarks Oman, Dubai and Murban tumbled on Monday as the latest OPEC+ decision continued to give the jitters to the market with doubts over the compliance of the voluntary cuts and fears about supply surplus.
Spot premium for Dubai crude fell to a six-month-nadir of $0.53 a barrel over the Dubai quotes.
The major oil producers last week agreed to a combined 2.2 million barrels per day (bpd) voluntary cuts for the first quarter in 2024.
The reductions are led by Saudi Arabia, who will roll over its 1 million bpd cut, and joined by Russia and six other OPEC+ countries.
However, market participants and analysts questioned the compliance with the agreement as some of the countries, including the UAE, Iraq and Russia, are producing above their quotas.
Meanwhile, Brazilian President Luiz Inacio Lula de Silva said Brazil will never join the OPEC+ group of oil-producing nations as a full member and instead only seeks to participate as an observer, suggesting the country will not participate in cuts.
In Asia, Indian refiners have resumed Venezuelan oil purchases through intermediaries, with Reliance RELI.NS set to meet executives from state firm PDVSA next week to discuss direct sales following the easing of U.S. sanctions on the South American country, people familiar with the matter said.
India’s return to Venezuelan oil could reduce its demand for other heavy grades such as Iraqi Basrah Heavy.
ASIAN REFINERIES
Kuwait Integrated Petroleum Industries Company said in a statement on Sunday that the third and final units at the al-Zour refinery are now operational.
The plant is now fully operational and refining capacity will increase to 615,000 barrels per day (bpd) from 410,000 bpd, the statement said.
SINGAPORE CASH DEALS
Cash Dubai’s premium to swaps dropped 59 cents to $0.53 per barrel.
NEWS
The U.S., EU and UK are pressuring Liberia, the Marshall Islands and Panama to increase oversight of ships carrying their flags to ensure they do not transport Russian oil sold above the price cap, a source who has seen the communications to the countries said on Friday.
The United States on Friday imposed additional sanctions related to the price cap on Russian oil, targeting three entities and three oil tankers as Washington seeks to close loopholes in the mechanism designed to punish Moscow for its war in Ukraine.
Russia’s Black Sea ports are working on Monday as weather conditions permit, the Ministry of Transport said in a statement, after storms caused considerable disruption to loadings of crude in recent days.
Source: Reuters (Reporting by Muyu Xu; Editing by Sohini Goswami)