Iraqi Basrah Medium offered at a discount of more than $43 to Murban — OilPrice
The gap in the oil market between the prices of grades that must pass through the Strait of Hormuz and oil that can be shipped outside this route has widened. Iraqi Basrah Medium for loading next month was offered at a discount of $43.06 per barrel to the regional Murban benchmark, OilPrice reports, citing Argus data provided by Reuters.
Discounts for Iraqi oil
According to the publication, Murban, ADNOC's flagship grade, was trading above $127 per barrel. It is loaded at the port of Fujairah, which is located outside the Strait of Hormuz. At the same time, most Iraqi oil is loaded in the Persian Gulf, so it must pass through the strait.
OilPrice notes that Iraq, OPEC's second-largest producer by output, has suffered serious disruptions in its oil industry because of the war between the United States and Israel on one side and Iran on the other. According to the publication, the country had to halt well operations at the beginning of the year and offer substantial discounts to attract buyers willing to assume the risks of transporting oil from the Persian Gulf.
Windward vessel-tracking data indicate a significant reduction in tanker traffic through the strait. On September 14, one tanker exited the waterway and two more entered it; all three vessels were gas carriers transporting liquefied petroleum gas.
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Premiums for oil outside Hormuz
Oil that does not need to be transported through the Strait of Hormuz is trading at high premiums. Australia's medium-sour Pyrenees grade cost $138.04 per barrel last Friday, compared with $70.59 on February 27. OilPrice, citing Reuters, calls Pyrenees the most expensive crude grade according to Argus data.
Russia's Far Eastern ESPO grade was trading at a premium of up to $10 per barrel to Brent at the beginning of the month. As OilPrice writes, independent Chinese refineries increased purchases of ESPO, replacing Iranian volumes, while Indian refineries also increased acquisitions of this grade. ESPO exports from the Kozmino port rose by 6% in the first half of the year.
Brent, according to the data cited by the publication, was trading above $107 per barrel, while WTI was approaching $103. OilPrice also reported that Saudi Arabia is repairing the East-West oil pipeline and that Yemen's Houthis carried out new strikes on targets in the kingdom.
