Prices for Norway’s Johan Sverdrup crude soared on Tuesday, a move traders said could be linked to mounting concerns around the security of crude flows into Europe following maritime attacks by Yemen’s Houthis in the Red Sea.

Three mid-January cargoes of Johan Sverdrup traded in the S&P Global Commodity Insights (formerly S&P Global Platts) trading window on Tuesday at an average differential to the dated Brent crude benchmark of minus $1.35 a barrel, with TotalEnergies picking up one cargo and BP two.

Neither BP nor TotalEnergies immediately responded to Reuters’ request for comment, which was made after usual London business hours.

The sudden rise in Johan Sverdrup demand could be at least partly linked to worries around delays to Middle East crudes arriving in Europe, four crude trading sources with knowledge of the North Sea market told Reuters.

Rerouting tankers away from the Red Sea and around the Cape of Good Hope in light of recent Houthi attacks would significantly add to voyage times, which could have knock-on effects on company supply chains such as refinery crude intake schedules.

“You need a local alternative to bridge the two-to-three week gap,” if diversions occur, a crude trader who asked not to be named said.

BP announced on Monday it would be temporarily suspending all transits through the Red Sea following a spout of Houthi attacks over the weekend.

Freight rates are also rising as a result of Red Sea tensions, which could make local grades more competitive for European buyers, the source added.

Shipping issues in the Red Sea were most likely to impact flows of medium sour grades such as Saudi Arab Light and Iraqi Basrah Medium, a source said, making Johan Sverdrup a particularly suitable local alternative. Other North Sea grades are typically light sweet.
Source: Reuters