Middle East Crude

In trade of Abu Dhabi graders, some long-term contractors were in talks with ADNOC to change the contracts. Term buyers with long-term contracts for Umm Lulu and Das with supply bases in the Persian Gulf hoped to take Murban instead of these grades. As the Strait of Hormuz was again blocked, ADNOC appeared to have faced difficulties ensuring supply for Das and Umm Lulu that were loaded within the Persian Gulf. ADNOC apparently believed that supply of Murban would be secured as the grade is supplied from the Fujairah port located outside the Strait of Hormuz.

African/European/Russian/American Crude

In trade for Angolan crude, buying interest from Europe and the Mediterranean weakened as with transit risks through the Bab el-Mandeb Strait remaining elevated, Saudi Aramco shifted Yanbu-loading crude exports from Asia to Europe. As a result, Saudi medium-heavy crude supplies increased in the European market, weighing on demand for Angolan grades. Meanwhile, although September-loading Angolan crude sales to Europe were expected to decline, stronger demand from Asia was likely to offset the decrease, with market participants expecting overall demand for Angolan crude to remain resilient.

Asia Pacific Crude

The supply program for October-loading Australian Ichthys condensate has been finalized the end of last week. Three cargoes were set to be supplied, in line with typical monthly volumes. Firm demand is expected for October-loading Ichthys condensate. Delivered prices in Asia for US crude such as WTI Midland, which Asian end-users have been procuring as alternatives to Middle Eastern grades, remain high. If this trend continues, buying interest in Ichthys condensate, which has a shorter transportation distance to Asia, could increase. However, if the US and Iran agree to reopen the Strait of Hormuz, inflows of Middle Eastern condensate into Asia are expected to increase sharply. Attractively priced Middle Eastern condensate is likely to erode demand for Ichthys.