Spot premiums for Middle Eastern crude benchmarks return to levels seen before the Iran war this week as ample supplies weigh on the market, while cooling refining margins in Asia slow buying interest.
Middle Eastern producers have ramped up crude exports in September and October, which J.P.Morgan analysts say has created a surplus, despite rising attacks on vessels transiting the Strait of Hormuz.
The wave of supply has depressed Middle Eastern crude benchmarks this week to their lowest premiums since July, when an initial agreement to end the US-Israeli war with Iran enabled more Gulf oil exports through the Hormuz strait.
Dubai’s cash premium to swaps slumped to 65 cents a barrel on Monday, the lowest since July, before recovering to $1.55 a barrel on Thursday, Reuters data shows.
Oman’s premium dropped to 95 cents a barrel on Tuesday, the weakest since July, before nudging up to $1.76 on Thursday, Reuters data shows. These premiums mark a big drop from last month’s average of about $8 a barrel.
