Qatar Al Shaheen crude tender awarded, premiums higher

Quantum Commodity Intelligence – QatarEnergy has awarded its monthly Al Shaheen tender for September loading, with premiums comfortably higher than levels seen in the previous two months.

The state-owned firm was heard to have awarded five cargoes of the medium sour grade late last week at premiums averaging around +$1.70/b versus the underlying Dubai swap.  

Premiums for the early-September cargo were rumoured to be above +$1.80/b, while late-month cargoes were heard around +$1.60/b, reflecting the backwardation.  

The tender included one first-decade cargo, one second decade and three for the last decade.

Last month, the state-owned firm awarded three cargoes of the medium sour grade at premiums ranging from as low as +$0.80/b to around +$1.05/b for an early-August cargo.  

Al Shaheen is priced during the month of loading, so it includes two months of backwardation – hence during the loading month of September, November is the trading month for Dubai.

Premium

So far in July, the M1/M3 (Sep23/Nov23) Dubai cash spread has averaged around $1.40/b, up from $0.75/b in the first half of June, an early indication that Middle East OSPs could be in line for increases on September-loading cargoes.

The Al Shaheen tender is closely watched as it acts as a bellwether for the Middle East medium-sour crude market and is also a component of the Dubai 'basket' of crudes, often setting the Dubai print as the lowest of the five deliverable grades into the pricing mechanism.

The tender award puts Al Shaheen at a small premium to Upper Zakum and Oman, which are setting the Dubai assessment so far this month as part of the 'Dubai basket' of crudes, which also includes Dubai and Murban.

It is also seen as a guide for Saudi Aramco's flagship Arab Light OSP, which traders said could lead to September-loading cargoes either little changed or slightly higher from the current Platts Dubai/DME Oman +$3.20/b.