Middle East Crude Slips Into Discounts as US-Iran Deal Lifts 4 Million Bpd Supply Outlook
Updated
Updated · Reuters · Jun 17
Middle East Crude Slips Into Discounts as US-Iran Deal Lifts 4 Million Bpd Supply Outlook
3 articles · Updated · Reuters · Jun 17
Summary
Dubai’s premium to swaps fell to a 46-cent discount on Tuesday, while spot Oman and Murban flipped to discounts of 67 cents and 49 cents as traders priced in a Hormuz reopening.
The U.S.-Iran framework deal improved supply expectations for a waterway that carried about a fifth of global crude and LNG, with Kpler saying roughly 4 million barrels a day was already moving before the breakthrough.
Weak Asian demand, especially from China after refinery run cuts, amplified the selloff by pushing Middle East benchmarks into contango and reducing prompt buying interest.
Falling regional prices reopened arbitrage to the West: traders said 13 million to 15 million barrels of Middle East crude are heading to the U.S. and Europe, including cargoes linked to Exxon and TotalEnergies.
That shift also squeezed competing grades, with Murban turning cheaper than WTI for European buyers and the U.S. WTI-to-Asia export window closing in early June.