Mideast Gulf crude discounts deepen as Asian refiners turn to Atlantic barrels

Ample Middle East crude supplies and falling tanker rates are reshaping competition for Asian refinery demand.

• Dubai's prompt premium collapses: Dubai M1–M3 narrowed from +$11.03/bbl on 6 October to +$1.03/bbl on 12 November, approaching contango as Middle East crude supply availability improves. Saudi Arabia and Kuwait have cut December OSPs by $2/bbl, intensifying competition to defend market share in Asia.

Dubai M1/M3 spread, $/bbl

Source : Kpler (derived from market sources)

• Atlantic crude attracts Asian buyers : Chinese refiners are stepping up purchases of West African and Brazilian crude despite cheaper Middle Eastern alternatives. Kpler assessments show Agbami's landed value into Ningbo falling $11.95/bbl w/w to +$19.65/bbl versus Dubai Swap for late-November loading. At current levels, prompt Agbami cargoes are around $4/bbl more competitive than Murban, strengthening the incentive for Asian refiners to source West African barrels.
• WAF differentials set to strengthen : We expect improving eastbound economics and renewed Asian buying interest to support West African crude differentials, particularly as falling freight gives sellers room to capture some of the delivered-price advantage. However, further Gulf OSP reductions could erode that competitiveness and limit the upside.

Agbami landed value into East, w/w comparison, $/bbl relative to Dubai swap

Source : Kpler

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