Stronger appetite for Middle Eastern crude grades from China and India has added upward pressure on prices for these grades, pushing the Dubai futures close to $100 per barrel, Bloomberg reported today, citing unnamed traders.
Demand for Middle Eastern oil is especially strong from refining majors such as Indian Oil Corp. and PetroChina, as well as refiners in South Korea and Japan, the report said. This is despite the latest escalation between the United States and Iran, with Saudi Arabia’s oil exports dropping to the lowest since 2017, according to data from ship-trackers including Kpler and Vortexa.
A further price rally may well be on the table as some cargoes face delays from August to September and October, Bloomberg also noted. At the time of writing, Murban futures, the UAE benchmark, was trading at $106.10 per barrel, and DME Oman, the Middle East sour crude benchmark for Asia, was trading at $99.18 per barrel.
The stronger demand comes despite depressed flows of oil via the Strait of Hormuz. Over the past week, the average daily volume of oil making its way via the waterway stood at between 6 and 8 million barrels.
Asian buyers, meanwhile, are also stepping up purchases from other regions, notably Brazil, Canada, and Argentina, with China and India also buying more Russian crude.
While Middle Eastern oil prices rise, Brent crude and West Texas Intermediate dipped yesterday, reflecting uncertainty about developments in the Middle East even as mutual strikes between the United States and Iran continue. According to some analysts, the dip in prices came in response to a pause in the strikes. It appears traders believe the pause could extend, despite a statement by President Trump that “It was a very heavy attack last night, and we’re prepared to do another one any time we want.”
By Irina Slav for Oilprice.com
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