Middle East/Asia crude premiums seen easing on Iran return, easing Dubai structure

London, (Quantum Commodity Intelligence) – Premiums for Middle East and Asia crude oil have eased back in the second half of the week on expectations of increased Iranian exports during the second half of the year, plus a weaker Dubai structure.

A third round of July-loading ESPO tender cargoes from Russia's Surgutneftegaz have been awarded at premiums of Dubai swaps between $3/b and $3.10/b, compared to a near one-year high of +$3.50/b on the second tender earlier this week, said sources.

Meanwhile, a spot cargo of Upper Zakum cargo was heard done at around Dubai swaps +$1.30/b.

Upper Zakum was bid at Dubai +$1.25/b earlier in the week, although the Abu Dhabi medium-sour grade didn't trade.

However, similar-quality Qatari Al Shaheen was sold via tender at Dubai +$1.70/b.

Dubai structure eases 

Cargoes are sold as a differential to the underlying Dubai price in the loading month, so a cargo loading in July is effectively pricing as a differential to September.

The Dubai M2-M4 (July-Sept) market structure firmed to $1.40/b earlier this week, but has subsequently eased to around $1.20/b, according to Quantum data.

The July Dubai market has otherwise found strong support this month with the trading arm of French major, Totsa, reportedly buying eight cargoes of Oman, Al Shaheen and Upper Zakum in the MOC trading window.

The three grades are 'deliverable' against a convergence of Dubai partials, where 20 clips of 25,000 barrels result in a physical cargo delivery with the seller able to nominate Dubai, Oman, Upper Zakum, Al Shaheen or Murban.

But the Dubai structure has eased following reports of progress in the latest round of Iranian talks that could result in increased exports from the currently-sanctioned producer during the second half of the year.