US sour crude from SPR heads to Europe

Market: Crude oil
23/04/26

Trading companies are offering sour crude from US strategic petroleum reserves (SPR) to European refiners at discounts to local grades, which is pressuring prices for local crudes.

Vitol, Trafigura, Shell and Mercuria received around 26mn bl of crude from the US SPR, mostly sour Bryan Mound and less sulphurous West Hackberry Sweet, traders said. Those companies are now offering cargoes at around $5/bl premiums to North Sea Dated on a delivered basis to the Mediterranean and northwest Europe.

This was unconfirmed with the companies, and the split between sour and sweet supply was not immediately available. A trader said all 26mn bl due to arrive in May will be sour, while sweet supplies are for June arrival.

The offers are well below prices for European grades. May supplies of Norway's medium sour Johan Sverdrup were recently offered above a $12/bl premium to Dated on a fob basis, but likely to trade no higher than $9/bl. This is at least $7/bl lower from the week before.

In the Mediterranean, interest fell in Libyan medium sweet Es Sider, with the majority of May-loading cargoes still left to be placed with buyers, traders said. This marked a reversal from recent weeks, when Mediterranean refiners had scrambled for the grade as a substitute for lost Mideast Gulf medium sour supplies. Offers for Algeria's Saharan Blend fell from a $15/bl premium to Dated on a fob basis earlier in the week to just a $3/bl premium on the same basis in the latest session, traders said.

Crude prices in Europe reached all-time highs in late March-early April, driven by global shortages following the effective closure of the strait of Hormuz. That sent refining margins for some oil products negative last week, with some refiners in Europe considering run cuts to cap losses. But as crude prices eased this week, product margins rebounded into positive territory. Incoming supply from the US might help improve refinery profitability in Europe.

By Lina Bulyk and Ellanee Kruck

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23/04/26

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23/04/26

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22/04/26

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21/04/26

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