Middle East crude premiums surge, Asian refiners seeking alternatives

The rising security threat has already forced several oil tankers to change course in the Red Sea to head north towards the Suez Canal even as two Chinese supertankers exited on Thursday from Bab el-Mandeb into the Gulf of Aden. Saudi Aramco has offered additional crude cargoes for loading from Egypt's Mediterranean port of Sidi Kerir, according to five trading sources. Several Asian refiners are looking for cargoes and vessels loading from the Egyptian port, two traders said. South Korea's largest refiner SK Energy has chartered a very large crude carrier (VLCC) to load 2 million barrels of crude from Sidi Kerir to Ulsan on August 18-20 at a lump-sum freight rate of $18.5 million, shipping sources said. The Korean refiner did not immediately respond to a request for comment. SINGAPORE, July 24 (Reuters) - Spot premiums for Middle Eastern crude benchmarks hit their highest in two months as attacks on two tankers in the Red Sea triggered a rerouting of some Saudi oil shipments via a route that circles Africa, further disrupting supply flows. The attacks in the Red Sea by Yemen's Iran-aligned Houthis came after renewed U.S. and Iran strikes in the Middle East and shipping blockades on traffic through the Strait of Hormuz again choked oil shipments through that crucial waterway, slowing crude oil and fuel exports to Asia. Spot premiums for Middle East benchmark Dubai to swaps doubled on Thursday to $12.74 a barrel, while Oman's premium climbed to $12.62, Reuters data showed. Both premiums are the highest since end-May. CRU/M Consultancy Energy Aspects said in a note on Thursday that it expects premiums to rise further and the spread between Brent and Dubai to narrow as the ship attacks will prompt more cargo diversions and deter shipping through Bab el-Mandeb, the strait that connects the Red Sea to the Gulf of Aden. Brent's premium to Dubai settled at $13.22 per barrel on Thursday, the highest since May 4, according to LSEG data. The premium for Abu Dhabi's flagship Murban crude surged to $19.04, the highest since April 7, on tight supply for light-sour crude as ship attacks in the Black Sea compounded the supply problems in the Middle East. Kazakhstan said on Thursday it had reduced oil production after suspected Ukrainian drone attacks forced its main export terminal for CPC Blend crude on the Black Sea to close. Middle Eastern grades had traded at wide discounts earlier this month during the short-lived truce between the United States and Iran. "Buyers are now scrambling to secure supplies, with Japanese and South Korean refiners rushing into the market to buy cargoes," said one of the traders with a refiner, adding that the North Asia refiners are seeking Atlantic Basin crude. Two major Chinese refiners bought most of the September-loading Russian ESPO Blend cargoes available from the Pacific port of Kozmino, and Indian refiners have also stepped up purchases of Russian oil. (Reporting by Siyi Liu in Singapore; Editing by Florence Tan and Tom Hogue)

Middle East crude premiums surge, Asian refiners seeking alternatives

Aramco offers more cargoes from Egypt

Middle East premiums hit two-month highs

Asian refiners turn to alternative grades

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