The number of supertankers bound for Egypt rose to the highest since at least November, prompting speculation more Middle East crude may be flowing to Europe as a result of rising prices for competing Russian grades.
There were 11 very large crude carriers able to transport about 22 million barrels signaling for the North African country, ship-tracking data compiled by Bloomberg showed as of about 7 a.m. London time today. That was up from seven a week ago and exceeded the prior high of 10, reached June 5. Ten of the vessels previously went to Saudi Arabia, Iraq or Kuwait.
Russia’s Urals crude jumped to the highest premium to Dated Brent in at least two decades yesterday after the nation’s seaborne exports declined to the lowest in at least five years. A pipeline crossing Turkey to supply Iraqi oil to the Mediterranean region was halted at least twice in June.
“In the Med, Urals is very strong, and you had disruptions to the pipeline from Iraq that’s been down quite regularly,” Olivier Jakob, the Zug, Switzerland-based managing director of industry researcher Petromatrix GmbH, said by phone today. “When one looks at the prices in the Med, it makes sense to see a little more flows.”
Urals cost 73 cents a barrel more than Dated Brent in the Mediterranean yesterday, the highest since at least July 1991, when Bloomberg started tracking the data. Over the past two decades, Urals has usually traded at a discount to Brent, averaging almost $4 less than the North Sea benchmark in 2005.
VLCCs sit too deep in the water to use the canal when fully laden. They can pass along the waterway after unloading some cargo at Ain Sukhna into a pipeline that crosses Egypt. The ships also can discharge all of their cargo into the conduit, which runs to Sidi Kerir, a storage and shipping facility on the country’s Mediterranean coast.
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