Stringent U.S. restrictions on Iranian oil set for May are augmenting to a wealth of factors restraining global supply of heavy-medium crude, hiking prices for limited barrels, and establishing a stand-off among buyers and sellers. The recent restraints on Iranian exports come on top of Washington’s previous restriction on Venezuelan oil and output difficulties in Angola, another big producer of the substantial crude grades that effectively obtain lucrative refined products such as jet fuel. Officials from the U.S. have said that the general global supply of oil will remain abundant in spite of its ban, not least from the success in U.S. shale. However, most of the excess amount, led by Saudi Arabia, Russia, and the United States is in lighter grades.
Performance of the Crude Oil so far
The cost of heavier oils such as the Heidrun and Norway’s Grane had been compressing for the last few months, as reported by a North Sea trader. In April, Grane’s price increased. This month, Iraq’s SOMO made a sale of two million barrels of Basra dense oil to China’s Unipec at a bonus of more than two dollars barrel to its regular selling price, the maximum in months, as stated by sources. Producers are also searching for more fine crude from Venezuela and Iran to manufacture low-sulfur oil before the latest shipping emission regulations due next year.
Different Oil Prices Come Out in the Market
On Monday, JBC Energy noted that for the past week, they had witnessed excellent oil differentials emerging markedly, as the anticipated IMO impact has begun to manifest its mark on the crude industry. JBC referred to price assessments from Argus that bonus for Australian dense, excellent grades Pyrenees, and Van Gogh versus the North Sea increased by two dollars per barrel to a score of nine dollars per barrel.