How to find profitable crude arbitrage opportunities: Your guide to smarter trading

In today's crude oil markets, the difference between capturing a profitable arbitrage and missing it entirely often comes down to speed and access to information. With Russian sanctions tightening, Red Sea disruptions reshaping freight routes, and new refining capacity altering traditional trade patterns, traders need to process more variables than ever before.

The challenge? Most traders are still juggling multiple spreadsheets, broker calls, pricing services, freight costs, and flow data across different platforms. By the time you've gathered all the pieces, the opportunity may have already closed.

That's exactly why we built Kpler's Crude Arbitrage tool - to bring everything you need into a single, continuously updated interface.

The foundation: What you need to know

Crude arbitrage is the practice of identifying price differences for crude oil across different markets, grades, or delivery points. But execution demands precision. You're not just comparing spot prices - you're calculating landed values that incorporate FOB differentials, freight costs, benchmark spreads, time structure, insurance, and quality adjustments. Miss one variable, and what looked like a 50-cent opportunity becomes a 25-cent loss.

Start with your perspective

One of the most common mistakes traders make is analysing an arbitrage from the wrong angle. Kpler’s Crude Arbitrage solutions allows you to view importer and exporter views instantly. As an importer, you want to find the cheapest barrel delivered to your refinery. As an exporter, you want to maximise netback realisation. The Kpler platform covers 10 major trading regions including China, India, Singapore, Mediterranean, Northwest Europe, West Africa, Brazil, and US Gulf, Atlantic, and West Coast.

Five cost components, total transparency

The five inputs every trader needs to get right are:

• FOB differential – What you're paying at the loading port relative to benchmark (updated daily)
• Time structure – The contango or backwardation impact on your P&L (updated every 30 minutes)
• Benchmark differential – Spreads between pricing indices like Dated Brent vs. Dubai Swap (updated every 30 minutes)
• Freight – Vessel rates plus canal fees based on current market levels (updated daily)
• Other costs – Insurance, financing, demurrage, outturn loss

As one of our experts says: "You never make money when you sell the cargo; you make money when you buy the cargo." This breakdown shows you exactly where you're winning or losing.

Flexible benchmarks for real opportunities

A less visible but significant source of missed arbitrage is benchmark mismatch - different regions price crude against different indices. Kpler Arbitrage defaults to the most common benchmark for each region, but you can instantly switch between Brent Futures, Dated Brent, Dubai Swap, and WTI. The spreads between benchmarks are where the real money gets made.

Test your own view: The Scenario Builder

Market conditions move fast. Maybe you're seeing different FOB diffs from your broker or have better freight rates. Kpler Arbitrage allows you to override any input field - FOB diffs, freight rates, benchmark spreads, cargo quantities - and the platform instantly recalculates with your numbers. This isn't about proving we're right; it's about giving you a flexible canvas to test ideas. Importantly, this allows you to stress-test any trade idea against your own market view before committing capital, rather than relying solely on published inputs.

See who's actually trading it

Theoretical arbitrages are interesting. Real arbitrages that people are executing? That's actionable intelligence. One of the most dangerous traps in crude arbitrage is an opportunity that looks compelling on paper but isn't executing in the physical market. Absent flows can signal sanctions exposure, quality issues, or logistical constraints that don't show up in a cost calculation. Kpler Flows overlay shows 12 months of actual cargo movements on each route. When landed values drop and physical flows increase, that's validation. When values look attractive but flows are absent, that's a red flag - maybe there are sanctions issues or quality problems your calculation doesn't capture.

Beyond delivered cost: Refinery economics

Sometimes the cheapest barrel delivered isn't the most profitable barrel to run. Our refinery margin analysis calculates gross product worth - what you actually make when you process each crude through different refinery configurations. A crude might cost $2/barrel more delivered but yield $5/barrel higher margins.

Integrated intelligence

Every arbitrage view automatically surfaces relevant research from our 50+ analyst team. The weekly Arb View report provides trading calls, market commentary, and forward-looking analysis. Because numbers without context are just numbers.

The bottom line

In crude arbitrage trading, margins of 25 cents per barrel constitute a good day. The difference between capturing that margin and missing it often comes down to having the right information at the right time. Finding profitable crude arbitrage opportunities consistently requires real-time visibility across landed cost, physical flows, refinery economics, and benchmark spreads - all in one place.

We built this tool to aggregate everything you need into one continuously updated screen. Because in a market shaped by evolving sanctions, shifting trade flows, and volatile freight rates, speed and clarity aren't luxuries - they're requirements.

Ready to transform your trading desk?

Book a personalised demo and discover how Kpler's Crude Arbitrage tool delivers the competitive edge you need.