Tariff uncertainty eases the momentum in the Americas heavy sour market

Executive Summary

Americas:

• Bullish WCS Hardisty and Maya in the short term as a temporary tariff pause could lead to a slight recovery.
• Bearish Venezuelan crude supply with Chevron having to wind-down activity in one month.
• Slightly bearish on other heavy sour Latam grades in the short term as the end of Carnaval season in South America will boost combined exports from Argentina, Colombia and Ecuador in March.

Europe and Africa:

• Bearish on Norwegian crude supply in March as bad weather has delayed the ramp up of the Johan Castberg field
• Bearish on CPC Blend differentials due to the Tengiz field expansion driving higher availability this month
• Bullish on Sudanese crude supply as Dar Blend exports have resumed since late February

Middle East - Asia - Russia:

• Bearish on Asian market structures as the anticipated unwinding of OPEC+ cuts from April onwards, combined with still robust Iranian crude flows, keeps regional markets well supplied.
• Bearish on North Sea crude flows to Asia, particularly for European medium density crudes, which remain pricey compared to their lighter peers, as a potential weakening in the Dubai benchmark weakens west-to-east arbitrage opportunities.
• Neutral on Iranian crude flows to China in March, which have ticked up strongly in February, with Iranian crude supply remaining elevated, despite Donald Trump's maximum pressure campaign.