Premiums rose sharply in crude oil markets. New US sanctions against Russian energy giants Rosneft and Lukoil due to the Ukraine war have accelerated China and India’s search for alternative supplies from the Middle East, Africa and South America.
On Thursday, the global benchmark Brent futures rose more than 4%, while spot Middle East oil prices reached their highest levels of the month. The Cash Dubai premium rose to $2.71 per barrel, reaching a three-week high; Premiums for the Oman and Murban varieties also rose to $3.12 and $2.86 respectively.
India’s private sector giant Reliance Industries terminated its long-term 500,000 barrels per day contract with Rosneft. State-owned companies IOC, BPCL and HPCL are similarly reviewing trade documents to halt direct supplies from Russia.
These developments have led India and China to turn to spot purchases from countries such as Qatar, Iraq and Brazil.
Energy analyst Richard Jones stated that “new purchases from the Middle East will quickly deplete the excess supply in the market.” Meanwhile, the Brent-Dubai price difference has fallen to 1 cent, making the export of Atlantic oil to Asia more attractive. The …
