SINGAPORE: Middle East benchmark Dubai crude soared to a record this week while spot premiums for April-loading Russian oil jumped to their highest in more than two years in Asia, trade sources said on Wednesday as prices returned to pre-pandemic levels.
The global supply-demand balance has tightened as the Organization of the Petroleum Exporting Countries and its allies are lagging behind commitments to increase output by 400,000 barrels per day each month.
Demand, meantime, is robust as refiners globally are cranking up operations to reap higher margins on gasoline and diesel.
The Russia-Ukraine crisis has also boosted Brent prices, pushing the benchmark's premium to Dubai to its highest since 2013 this week.
Oil prices hold steady as Russia-Ukraine tensions cool
There was no immediate sign of the price spread weakening after Russia pulled back some of its forces from the border on Tuesday.
The wide spread between the benchmarks is boosting Asia's demand for Middle East and Russian grades priced off Dubai, leading spot premiums to hit multi-year highs this month.
Cash Dubai hit a record high at Tuesday's market close, breaching $4 a barrel premium over futures for the first time, oil pricing agency S&P Global Platts reported.
The April cash Dubai versus same-month Dubai futures was assessed at a premium of $4.08 a barrel, Platts data showed.
For Russian grades, spot premiums for ESPO Blend crude exported from the Far East port of Kozmino soared to their highest in more than two years after producer Surgutneftegaz sold three cargoes via a tender, trade sources said.
The cargoes for late March to early April loading were sold at premiums of $7-$7.10 a barrel above Dubai quotes, they said, about $2 higher than last month.
ESPO crude premiums were last seen at these levels in December 2019, Refinitiv data showed.
Trading houses Mitsui and Petraco bought the cargoes, the sources said.
Similarly, spot premiums for Russian Sokol crude loading in April jumped to their highest since January 2020 after India's ONGC Videsh sold a cargo via a tender, they added.
The cargo for April 19-25 loading was sold to Glencore at a premium of $7.80-$7.90 a barrel to Dubai quotes, the sources said.
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