OPEC's production cutbacks and US sanctions against Venezuela and Iran limit the availability of heavy and acidic raw materials to Europe, where heavier grain prices have recently skyrocketed in an increasingly tight-knit market, according to the crude oil traders of S & P Global Platts.
US sanctions against Iran have already limited part of Europe's high-grade supply. With the new round of OPEC / non-OPEC cuts beginning in January, Basra Light and Heavy in Iraq, which are generally very popular among European refineries, were also in short supply on the spot market in Europe as Iraq diverts more barrels from Basra on the premium market for manufacturers from the Middle East: Asia.
"Towards the end of February, no Basrah charges will arrive in Europe without a destination, targeting Asia," a crude dealer told Platts.
To end sanctions against Iran and OPEC US sanctions against Venezuela further exacerbated the harsh crude oil market in Europe at the end of January, and traders expect the market to contract further in the coming months.
The sanctions against Venezuela and against Iran, as well as the OPEC cuts, have led to a major imbalance between light, sweet and heavy acid varieties, especially in Europe, as the Middle East and other oil producers are targeting their sales on the to keep Asian market.
Due to the narrower supply of medium and heavy products sour Crude, benchmarks for sour oil in the Middle East were trading higher than the Brent crude oil prices in early February, which was a rare development of global oil prices.
In Europe, some acidic raw materials, such as the Russian Ural, have increased According to the data from S & P Global Platts, the trade in premiums for sweeter crude oils is required due to the limited availability of sour and heavy crude oil.
"Ural is positive numbers, Basrah is trading at a dramatic premium for OSP and I do not understand why sour should be milder, demand is there, but there is not much available," said one trader to Platts. [1
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