Dirty Fuel Clampdown Risks Nosedive for Middle East Crude
- Value of Gulf oil to slip as lower-emissions rules take shape
- Saudi-Iran tension, U.S. sanction fail to give near-term boost
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The global push for cleaner-burning ship fuel is threatening to drive the value of Middle East crude to a record low even as supplies are squeezed.
The discount of Middle East’s Dubai crude to London’s Brent could widen beyond $8 a barrel from current levels around $4, according to Citigroup Inc. That would be the largest discount on record in data back to 2006, according to PVM Oil Associates. The spread is growing even as physical demand for Gulf grades rises as buyers try to replace barrels lost to Iranian sanctions.