Russian Sokol crude trades at 9-month high as Asian distillate cracks firm

London (Quantum Commodity Intelligence) - Russian light sweet Sokol crude for July has traded at the highest premium since last summer, as distillate-rich grades in Asia-Pacific are boosted by the wide Brent/EFS spread this month.

Sokol equity-producer ONGC sold the cargo to a US major at Dubai +$3.20/b, the highest premium since July of last year. At 37.7 degrees API gravity and around 0.17% sulfur, the grade competes with similar light sweet crude from the North Sea and West Africa.  

The wide Brent/Dubai spread in April and May has made barrels pricing versus Dated Brent more expensive for Asia refiners, so it will be more economic to pay a high premium for regional cargoes such as Sokol, which loads from the Russia Pacific.  

The Brent/Dubai EFS hit a 17-month high of $3.74/b on April 26, while the June Brent/Dubai cash spread hit fresh one-year highs of $3.04/b, according to Quantum data.

However, the spread has been trending lower during May, as Dubai gains ground on Brent.

The Brent/Dubai cash spread was assessed at $2.08/b on Wednesday, around $1/b lower from the April peak.

Sokol has also been underpinned by healthy distillate margins in Asia. Jet kero fuel cracks hit a 14-month high of $4.21/b on Wednesday for the front-month FOB Singapore, on optimism that air travel will recover for the summer months.

Diesel followed a similar pattern, with front month cracks versus August cash Brent rising to their highest since the outbreak of the pandemic at $5.87/b.