BY CONTINUING TO USE THIS SITE, YOU ARE AGREEING TO OUR USE OF COOKIES. REVIEW OUR COOKIE NOTICE
X


Crude oil values rise across the Mediterranean on Kirkuk outage

London (Platts)--3 Jul 2015 949 am EDT/1349 GMT


Most Mediterranean and Urals crude markets have strengthened this week, boosted by the absence of Iraq's Kirkuk from the prompt spot market, prompting end-users to seek replacement barrels.

Flows from northern Iraq -- where Kirkuk is produced -- to tanks operated by Iraq's State Organization for Marketing of Oil in Ceyhan, Turkey, were halted early last month amid ongoing disagreement over oil and gas payments between the Kurdistan Regional Government and central government in Baghdad.

Loading delays at Ceyhan have risen above 20 days, sources said.

"The situation is a total disaster," a crude trader said. "There has been no news from SOMO, and vessels have been waiting for nearly a month on demurrage. People should be nominating vessels for the July program."

Article continues below...


Platts Global Energy Awards
Nominations are Now Open! - Deadline is September 10th 2015
Platts Global Energy Awards
http://geaweb.platts.com/

The Platts Global Energy Awards is a competitive awards program honoring excellence and accomplishments in the global energy industry.

The 17th annual awards will be presented at a black-tie gala, attracting energy industry leaders from around the world on Wednesday, December 9th, 2015 at Cipriani's in New York.

Don't miss this opportunity to gain recognition for your company's achievements amongst the best of the best in the energy industry.

Platts Global Energy Awards


The resulting absence of one of the region's most reliable sour crude grades, prompted end-users to seek out the promptest alternatives.

"Basrah was coming into the Med a bit more, but Tupras, who is one of the biggest buyers of Kirkuk, has issued, and reissued and reissued tenders for any sour grade they can find into the Med," a trading source said.

"Any Basrah into the Med has been bought by Tupras."

Turkish refiner Tupras typically receives Kirkuk both via the Kirikkale-Ceyhan pipeline and by tanker. Since Kirkuk stopped flowing in June, the company has issued a series of tenders calling for Basrah Light, Urals, Russia's Siberian Light, Colombia's Vasconia, and Libya's Al Jurf and Bouri.

Values have soared in the region as a result.

Urals Aframax cargoes, basis CIF Augusta, were assessed flat to Dated Brent Thursday, their highest level since late November despite a longer loading program out of the Black Sea port of Novorossiisk in July.

"Kirkuk is driving everything," a trader said.

"It has been bullish on Urals, especially in the Mediterranean, and on Siberian Light both because of Kirkuk and because the total Urals [export] volume is not so significant...Tupras has been tendering almost every second day looking for different grades because they can't find enough Urals."

The first half of the July Urals loading program has been fully sold, traders said.

Similarly, Mediterranean sweet crude markets have pushed higher, particularly Azeri Light and CPC Blend.

On Thursday, Aframax cargoes of Azeri Light were assessed at a $1.60/barrel premium to Dated Brent, the highest level since mid-April.

Offers for remaining July volume have been coming from the other side of Dated Brent plus $2/b, traders said.

Aframax cargoes of CPC Blend have also pushed higher, assessed at Dated Brent minus $0.15/b, up from Dated Brent minus $0.50/b on June 25.

"It is definitely the lack of sour that has been the driver of everything," a trading source said, adding that offers for July cargoes of CPC Blend were coming from flat to Dated Brent.

More than two thirds of the Azeri Light and CPC Blend July programs have been sold, market sources said.

--Paula VanLaningham, paula.vanlaningham@platts.com
--Edited by Dan Lalor, daniel.lalor@platts.com




Copyright © 2018 S&P Global Platts, a division of S&P Global. All rights reserved.