Oil’s 60% Crash Is the Tip of an Iceberg. The Reality Is Worse
- Saudi price discounts have forced other grades to compete
- Nigeria offers barrels cheap, pressuring North Sea prices
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As oil crashes due to the impact of the coronavirus, it’s easy to overlook an even more dismal reality for producers: the real prices they’re getting for their barrels are worse still.
Having collapsed by about 60% this year, Brent and West Texas Intermediate crude have stabilized at around $25 a barrel, but the price rout is far deeper for actual cargoes, which are changing hands at large and widening discounts to the global benchmarks. The discounts mean that in the physical market, some crude streams are trading at $15, $10 and even as little as $8 a barrel.