• 2 minutes Oil Price Could Fall To $30 If Global Deal Not Extended
  • 5 minutes Middle East on brink: Oil tankers attacked off Oman
  • 8 minutes CNN:America's oil boom will break more records this year. OPEC is stuck in retreat
  • 1 min Here we go folks, the wish of so many: Pres. Trump threatens to lessen US security role in Strait of Hormuz, unveils sanctions
  • 2 hours Climate change & Wildfires: More Wildfires To The Western U.S., Will Affect Tens Of Millions Of People
  • 1 min The Inconvenient Truth Of Electric Cars
  • 3 hours Hard To Believe: UAE Will Work To Defuse Middle East Tension
  • 4 hours Oil Demand Needs to Halve: Equinor
  • 14 hours Here We Go: New York Lawmakers Pass Aggressive Law To Fight Climate Change
  • 47 mins The Plastics Problem
  • 4 hours Iran downs US drone. No military response . . Just Completely Destroy their Economy. Can Senator Kerry be tried for aiding enemy ?
  • 50 mins Cherry Picking Climate Data
  • 2 mins Looks like Trump is putting together a "Real" Coalition to protect Persian shipping lanes. Makes perfect sense. NO Fake "Coalition's of the Willing" UPDATE REUTERS Pompeo "Sentinel Program"
  • 4 hours Green vs. Coal: Bavaria Seeks Fast-Track German Coal Exit in Snub to Merkel Plan
  • 11 hours Solar Panels at 26 cents per watt
  • 14 hours Magic of Shale: EXPORTS!! Crude Exporters Navigate Gulf Coast Terminal Constraints
  • 10 hours Huge UK Gas Discovery
  • 13 hours Hydrogen FTW... Some Day
The 100-Year Old Wildcatter Poised For A Breakout

The 100-Year Old Wildcatter Poised For A Breakout

Noble Energy is an industry…

Hedge Funds Halt Selloff In Oil As Mid-East Tensions Spike

Hedge Funds Halt Selloff In Oil As Mid-East Tensions Spike

Hedge funds effectively stopped the…

Russia Replaces Venezuelan Crude On European Markets

oil storage

European refiners are switching to Russian sour grades as U.S. sanctions have shrunk Venezuela’s similar-grade exports, Reuters reports, adding that the Russian sour crude is getting increasingly expensive.

Citing sources from the trading industry, Reuters says the situation has been made worse by the fact that OPEC members have cut mainly their output of heavier, more sour grades under the OPEC+ agreement aimed at stimulating a price rise.

U.S. crude is not an alternative as it is overwhelmingly light and sweet, while refineries in Europe are equipped to process heavier grades as well as light ones to make refined products.

The news is the latest reminder that the world is tipping towards a shortage of heavy, sour crude, which is the staple kind of Venezuela crude and which many refineries need to produce fuels and other products.

“Urals is anchored in a positive zone versus dated Brent and there is no indication it will fall to a discount any time soon,” one of the Reuters’ sources said. That’s a complete reversal of the traditional differential between light and heavy oil, with the latter typically trading at a discount to Brent, a light blend.

Sanctions on Iran are further complicating life for European refiners as they have restricted exports of sour grades that Iran also produces in addition to its very popular superlight crude, also called condensate.

According to Reuters, U.S. sanctions have removed 800,000 bpd of heavy crude from the global market, leaving refiners scrambling for alternatives in a limited pool that, besides Russia and Middle Eastern producers, also includes Canada and Mexico as large producers of these grades of crude. The former is having its own problems with a pipeline capacity shortage and a production cut that has boosted prices, and the latter has yet to reverse a fall in oil production.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News