Lates News

Due to the shutdown of Saudi Arabia's east-west oil pipeline, European refiners have been forced to compete for alternative sources, while soaring fuel prices have further driven up crude procurement costs. After the attack on its pipeline to the Red Sea, Saudi Aramco is seeking to increase crude shipments through the Strait of Hormuz. This week, Asian buyers purchased tens of millions of barrels of Saudi crude from near the strait. However, this adjustment also means these cargoes are farther away from European refiners desperate for supply. On Friday, North Sea crude spot premiums surged to record levels. Previously, Saudi Aramco had informed European customers that it would be unable to supply crude to them under long-term agreements next month. Traders involved in market transactions said that Norway's Johan Sverdrup crude, which is relatively close in quality to Saudi crude, was quoted at up to $35 per barrel above the Brent spot benchmark. Less than two weeks earlier, the premium for the same grade was only 60 cents per barrel. The surge in spot crude prices indicates that European refineries are sparing no expense to secure crude supply in order to maintain sufficiently high refinery utilization rates and thereby ease the tight fuel supply situation. Diesel prices in the region have now risen above $200 per barrel.