Asian refiners seek more Mideast oil after spot premiums jump on Israel-Iran conflict

SINGAPORE /NEW DELHI: Asian refiners have requested more term crude oil supplies loading in August and September from producers in the Middle East after spot premiums jumped, six trade sources said on Friday.

Spot premiums for Middle East benchmarks rose above $3 a barrel on Thursday, the highest levels in four months, on fears of supply disruption after fighting broke out between Israel and Iran last week. “We are receiving additional interest from our customers in Asia,” a source at a Middle East crude supplier said, adding that the requests are for cargoes loading in August and September.

A source at an Asian refiner said the official selling prices (OSPs) for Middle East crude are lower than spot levels, making it more economical to seek more term supplies.

Two sources at Indian refineries said they will be receiving more July-loading term crude supply from Middle East suppliers as they anticipate lower supplies from Russia.

The sources declined to be named as they are not authorised to speak to the media. Producers such as Saudi Aramco, Abu Dhabi National Oil Co (ADNOC) and Iraq’s SOMO typically notify term customers on their allotted volumes a month before cargoes are due to load.

It is not immediately clear if the producers will supply more oil, three sources said, although one of them pointed to rising output from the bloc.

The Organization of the Petroleum Exporting Countries and their allies, a group known as OPEC+, are unwinding supply cuts, planning to increase output by 1.37 million barrels per day between April and July.