Middle Eastern Oil Is Flavor of the Month as Benchmarks Diverge
- Premium of global crude benchmark Brent over Dubai gaps out
- Backwardated prices make arbitrage flows to Asia unattractive
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Crudes from the Middle East are off to a strong start this month as a major divergence in global benchmarks favors grades priced off Dubai oil, highlighting strong global demand at a time of surging prices.
Oman crude for loading in April was pegged at about $4 a barrel over Dubai prices, according to Bloomberg estimates. That’s up from late last month, when premiums averaged about $2.70. Interest in Dubai-linked cargoes has risen given their discount to benchmarks such as Brent and West Texas Intermediate, which most European and American grades are priced off, traders said.