Oil Traders Pay Premiums to Secure 2024 Mideast Crude Supplies
11.04.2023 By Tank Terminals - NEWS

November 2, 2023 [Reuters]- Oil traders will pay premiums for the annual supply of most grades of Middle East crude in 2024, trade sources said, on concerns over supply from the region after the Israel-Gaza conflict heightened geopolitical tensions.


The annual deals between trading firms purchasing from producers and equity holders of Middle East crude were mostly concluded by the start of this week, nearly a month since the conflict between Israel and Hamas militants broke out, which has sparked fears of a contagion in the region and made global oil prices volatile.

The Middle East accounts for a third of global oil production.

Volatility in oil markets may have driven up prices for some of the cargoes sold in these annual deals, one trader said.

While premiums for most of the grades held steady, some of the Murban and Oman cargoes with 5% operational tolerance had been sold at steep premiums of 30-35 cents a barrel to their respective official selling prices (OSPs), the sources said.

Operational tolerance is the percentage volume that the buyer or the seller could adjust during the loading of the cargo, depending on demand and shipping logistics.

For cargoes with an operational tolerance of 0.2%, Abu Dhabi’s flagship Murban crude are priced at between 10 and 12 cents a barrel to their OSP while Oman was sold at premiums of 4-5 cents a barrel, the sources said.

Another Abu Dhabi light grade Das, with the same operational tolerance level, was traded at premiums between 1 and 7 cents to its OSP, one of the sources said.

Supply of Upper Zakum crude, the medium Abu Dhabi grade, swung between small discounts and small premiums to its OSP for cargoes with 0.2% operational tolerance, the sources said.


Pro Trial: Access 12,600 Tank Terminal and Production Facilities

12,600 tank storage and production facilities as per the date of this article. Click on the button and register to get instant access to actionable tank storage industry data

Phillips 66 to Sell 25% Stake in Rockies Pipeline for $1.28 bln
06.18.2024 - NEWS
June 18, 2024 [Reuters]- U.S. oil refiner Phillips 66 said on Friday it would sell its 25% stake... Read More
US Oil Refining Capacity Rises for Second Year in a Row
06.18.2024 - NEWS
June 18, 2024 [Reuters]- U.S. crude oil refining capacity rose 1.5% to 18.38 million barrels per ... Read More
Chevron Lummus Global's ISOTERRA Technology Selected for Sustainable Aviation Fuel Project in China
06.18.2024 - NEWS
June 18, 2024 [Lummus Technology]- Chevron Lummus Global LLC (CLG) today announced its ISOTERRA t... Read More
Russia's June Idle Oil Refining Capacity Raised by 114%
06.18.2024 - NEWS
June 18, 2024 [Hydrocarbon Processing]- Russia’s primary offline oil refining capacity has ... Read More