Murban, a light sour Mideast crude benchmark, drifted higher on Monday as the flare-up of the Red Sea tension widened spread between Brent- and Dubai-linked crude, making regional oil more appealing to Asian refiners.

The Brent/Dubai spread was pegged at $1.25 a barrel, a level last seen in late October.

The escalating tension in the Red Sea has led to an increasing number of tanker owners to steer clear of the region and multiple tankers to change course, which could drive up ton-mile demand and freight rates as the reroute via the Cape of Good Hope requires higher cost and longer time.

That could prompt European refiners to buy more crude from Atlantic Basin to avoid the high risk region in the Red Sea and bolster prices for Brent-pegged oil.

OSP

Iraq’a state oil company SOMO set the February official selling price (OSP) Basra medium crude to Asia at minus $0.80 a barrel to Oman/Dubai average, down $1.80 from the previous month.

Kuwait slashed the OSP for Kuwait Export Crude (KEC) to Asia in February by $1.85 from the prior month to $0.25 a barrel above the average of Oman/Dubai quotes, a price document reviewed by Reuters showed on Monday.

ASIAN REFINERIES

Thai Oil is planning to shut one of the three crude distillation units (CDU) at its Sriracha refinery complex later on Monday for repairs after production issues cropped up early last week, two sources familiar with the matter said.

Singapore Refining Company (SRC) said over the weekend that a minor fire occurred at its plant on Jurong Island on Wednesday last week.

SINGAPORE CASH DEALS

Cash Dubai’s premium to swaps rose 7 cents to $1.05 per barrel.

NEWS

Algeria’s Sonatrach and Libya’s National Oil Corporation (NOC) have signed two amendments related to extending the exploration periods in two blocks located in the Ghadames Basin in Libya, the two companies said in statements.

The Canada Energy Regulator (CER) on Friday approved a request for a change in construction for the final stretch of the Trans Mountain oil pipeline expansion project, clearing the path for its completion early this year.

The U.S. on Friday proposed a fee on emissions of methane from big oil and gas producers as required under the 2022 climate law and as a backstop to wider regulations on the greenhouse gas from energy operations.
Source: Reuters (Reporting by Muyu Xu; Editing by Mrigank Dhaniwala)