Oil benchmarks are hitting multiple price and spread milestones across several key markets as the fallout from severe sanctions on key exporter Russia sows confusion and panic among global crude oil traders, shipping firms and importers.
Brent crude topped $112 a barrel on Wednesday, the highest since 2014, shrugging off news that several developed countries plan to release a record 60 million barrels of strategic petroleum reserves to cool prices.
The oil industry has been gripped by acute risk aversion in the finance and shipping sectors after several nations including the United States sanctioned multiple Russian entities following Russia’s invasion of Ukraine, though Washington has explicitly exempted energy products from the Russian measures.
The price spread for Brent crude delivered between now and in 12 months is at $21.54 a barrel, the steepest on record, while Brent’s premium to Dubai – the price spread between sweet and sour grades – hit an all-time high of $13.05 a barrel on Wednesday, Refinitiv data showed.
That has driven demand for Middle East crude, with benchmark prices Dubai, Oman and Murban jumping to all-time highs of more than $10 a barrel above Dubai quotes on Wednesday, more than doubling from last month.
The wide spread between the benchmarks along with surging freight rates for oil tankers globally has also made it more expensive for Asian buyers to purchase oil from Europe, Africa and the United States, narrowing their options.
Refiners in Asia and Europe are expected to seek more supplies from the Middle East and the United States to replace crude from Russia and Central Asia, the sources said, even as official selling prices for Saudi crude are set to hit record highs in April.