Qatar issues Al Shaheen tender, premiums seen stable on month

Quantum Commodity Intelligence - QatarEnergy has issued a March sell tender for its keenly-watched Al Shaheen grade, with premiums for the Middle East medium sour crude grades seen stabilising following sharp declines since the summer peaks.

Qatar is offering just two cargoes for March, rather than the usual three, with one on early-month dates and the other for late March, with bids closing on 17 Jan. and validity until 18 Jan.

For February loading, the state-owned firm awarded three cargoes of the medium sour grade at premiums of $1.40-$1.50/b to the underlying Dubai swap, the lowest premiums since June of 2021, according to Quantum records.

Traders said the grade is currently valued at a similar level for March loading after premiums for medium sour grades recovered slightly, having languished at around +$1/b for most of the month.  

The regular monthly tender from Qatar is seen as a bellwether for the Middle East medium-sour crude market, as the grade is a component of the Dubai 'basket' of crudes, regularly setting the price of Dubai as the lowest of the five deliverable grades into the pricing mechanism.

The expected premiums are largely a function of the market structure, as Al Shaheen prices during the month of loading, so it includes two months of backwardation – hence during the loading month of March, May is the trading month for Dubai.

So far in January, the M1/M3 (Mar23/May23) Dubai cash spread has averaged $1.15/b but was assessed by Quantum at $1.47/b on Monday.

Traders said demand for spot March cargoes has been sluggish so far this month but looks to be picking up with additional demand seen from Chinese and Indian refineries.

Al Shaheen is also seen as a guide for Saudi Aramco's flagship Arab Light OSP, which traders said is on course to stabilise in March at around the current Platts Dubai/DME Oman +$1.80/b, following gradual falls since the summer.

The state-owned energy producer also issued tenders for one cargo each of Qatar Land and Marine grades.