Robust crude oil flows out of the Middle East in recent weeks have started to pressure the key metric of strength for physical supply out of the region.
The premium of Oman crude over Dubai, the measure of Middle East’s market strength, has slumped this week to the lowest level since the end of July, to $4.22 per barrel, according to data by General Index cited by 彭博社.
The Oman-Dubai crude differential had soared to as high as $65 in March when the Strait of Hormuz was at a virtual closure and no crude cargoes were moving out of the Middle East. The premium of Oman crude later slipped into a discount in the three weeks in the middle of June and early July, during which the U.S. and Iran were looking to negotiate a deal.
The differential blew out again in August and especially in September, when hostilities resumed.
But as the Middle Eastern producers accelerated shuttle-shipping through the Strait of Hormuz and ship-to-ship transfers in the Gulf of Oman, flows have recovered in recent weeks.
The higher availability, especially of spot cargoes, led to the Oman crude premium to Dubai slumping from as high as $30 per barrel in the middle of September to just above $4 per barrel this week, per data by General Index.
Crude oil flows from the Middle East are recovering; many tanker-tracking services say they are even topping pre-war levels.
But the cost to move the crude out of the region is very high—freight rates have soared to record highs amid a shortage of tankers. The increased oil flows from the Strait of Hormuz, mostly thanks to ship-to-ship (STS) transfers in the Gulf of Oman, are tying up supertankers for weeks waiting for the transfers outside the Strait, limiting the availability of very large crude carriers (VLCCs) for other key global oil trade routes, such as the U.S. Gulf Coast to Asia.
查尔斯·肯尼迪撰稿 Oilprice.com
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