The Address | Benghazi – Libya
SINGAPORE – Middle East oil benchmarks Dubai and DME Oman have nudged above prices for Brent crude, an unusual move as U.S. sanctions on Venezuela and Iran along with output cuts by OPEC tighten supply of medium to heavy sour oil, traders and analysts said.
Sour crudes, mainly produced in the Middle East, Canada and Latin America, have a high sulphur content and are usually cheaper than Brent, the benchmark for low-sulphur oil in the Atlantic Basin.
But Dubai spot prices and DME Oman crude futures for April have held above ICE Brent at Asia’s market close since the start of February, data from the Intercontinental Exchange (ICE), Dubai Mercantile Exchange and Refinitiv Eikon showed.
“The forceful implementation of U.S. sanctions on Venezuelan crude exports, the greater-than-expected recent Saudi crude output cut … and the uncertainty over U.S. sanction exemptions on Iranian crude have all served to strengthen sour crudes relative to sweet benchmarks such as Brent,” said Tilak Doshi, a Singapore-based analyst at consultancy Muse, Stancil & Co.
U.S. sanctions on Venezuela suddenly halted its crude exports to the United States last month and created a strong pull for medium and heavy sour crude from other places, said the traders and analysts.