Middle East Crude

As the Strait of Hormuz has been blocked once again, supplies of crudes from Saudi Arabia, Iraq, Qatar and Kuwait with supply bases inside the Persian Gulf have been suspended temporarily. State-owned Saudi Aramco in July sold spot cargoes of Saudi grades such as Arab Extra Light (AE) ex the Ras Tanura port and Juaymah port on a CFR basis, but the producer refrained from selling cargoes from Jul 12. Saudi Aramco appeared to be forced to suspend sales since it became difficult to secure vessels that can sail inside the Persian Gulf.

African/European/Russian/American Crude

For October-arrival trade in Northeast Asia, Japanese refiners showed strong buying interest in WTI Midland amid escalating tensions in the Middle East. ENEOS purchased 2.0mil barrels of October-arrival WTI Midland. Additionally, Cosmo Oil was also said to have procured 2.0mil barrels of October-arrival WTI Midland on Wednesday. The prices of these cargoes were at premiums in the $12s to $13s to Dubai quotes. Further, Idemitsu Kosan also appeared to be moving to procure cargoes at this time. Meanwhile, Korean end-users were also rushing to purchase. SK Energy purchased 4.0 million barrels of October-arrival WTI Midland, and GS Caltex purchased 3.0mil barrels of October-arrival WTI Midland.

Asia Pacific Crude

Supply and demand for Malaysian grades have tightened following the renewed closure of the Strait of Hormuz. Malaysia's state-owned Petronas had been expected to resume spot sales of Malaysian grades, including Labuan, once it secured a stable outlook for Middle Eastern crude procurement. However, with tensions in the Middle East worsening again, Petronas is likely to continue withholding September-loading spot supply. Players with steady demand for Labuan, including refiners in Thailand and Australia, "would pay premiums of at least $15.00 to Dated Brent" if a September-loading spot cargo emerged, a Singapore-based trader said.