Middle East Crude Markets Tighten With UAE, Iran Flows Curtailed

By Bloomberg

Dec 18, 2024

image is BloomburgMedia_SOO43WT0AFB400_18-12-2024_07-05-11_638700768000000000.jpg

A gas flame burns from a pipe close to an offshore oil platform in the Persian Gulf's Salman Oil Field, operated by the National Iranian Offshore Oil Co., near Lavan island, Iran, on Thursday, Jan. 5. 2017. Nov. 5 is the day when sweeping U.S. sanctions on Iran’s energy and banking sectors go back into effect after Trump’s decision in May to walk away from the six-nation deal with Iran that suspended them. Photographer: Ali Mohammadi/Bloomberg

(Bloomberg) -- Crude markets in the Middle East are tightening as the United Arab Emirates curbs sales and flows from Iran are hampered by sanctions.

The prices of several key Middle Eastern grades have risen, according to traders dealing with the typically higher-sulfur, or sour, oil from the region. Cargoes of Qatar’s Al-Shaheen for February loading were about $1 a barrel more expensive than the regional benchmark, compared with a premium of as much as 70 cents for January, they said.

Prices of Oman crude — a popular grade with refiners in China — and of the UAE’s Murban grade have also increased relative to the Dubai benchmark over the past month, according to data from General Index.

The higher costs signal increased scarcity of Arab Gulf barrels for Asian importers and come as the UAE plans to curtail sales early next year, with OPEC+ seeking stronger discipline in meeting production targets. Growing scrutiny and sanctions by the US and Europe on the flows of Iranian barrels are also hampering supplies.

By Yongchang Chin