Ukrainian strikes to slightly lift MED light sweet differentials

Executive Summary

Americas:

• Bearish on Guyanese crude differentials, despite declining Guyanese exports (amid a lower loading schedule for April), with lower European crude demand keeping a lid on export demand.
• Bearish on light sweet crude differentials (i.e. WTI), despite moderately high supply outages in North Dakota this week, as a recovery in shale supply in late February, higher refinery maintenance, and refinery closures, keep regional light sweet crude markets oversupplied through Spring.

Europe and Africa:

• Bearish on Russian crude demand in February as refineries are affected by Ukrainian drone attacks
• Bullish on CPC crude valuations due to lower availability, with differentials potentially moving to the -$2/bbl to -$3/bbl bandwidth vs Dated
• Bearish for Johan Sverdrup exports and differentials as demand softens and alternative grades remain competitive

Middle East - Asia - Russia:

• Bearish on Dubai backwardation, with the three-month spread falling to $3/bbl. The correction is likely to continue, driven by increased discharges of Iranian and Russian crude into China.
• Other Middle Eastern medium sour crude diffs to continue correct, as increased imports of sanctioned crude reduces demand for Al Shaheen, Das and Upper Zakum grades.
• Bearish on Asian light sweet grades, as WTI imports into China plummet, but cargoes manage to find a home elsewhere in Asia-Pacific due to an open west-to-east arbitrage.