TotalEnergies sees Brent-Dubai crude price gap remaining negative
TotalEnergies' executive stated on Monday that the price gap between Brent crude and Dubai crude will remain negative because of strong demand for Middle Eastern heavier oil despite increased supplies from OPEC countries.
Rahim Azouni was TotalEnergies senior vice president of shipping and trading at the APPEC Conference in Singapore, a day after OPEC+ (which includes the Organization of the Petroleum Exporting Countries, Russia, and other allies) agreed to increase oil production starting October.
He said: "Clearly, today's market is looking to heavier grades... This is why we are seeing the Brent-Dubai moving in the negative direction."
He added, "We continue to see this trend despite OPEC adding crude oil to the market."
Sweet grades are more attractive to Asian refiners than Middle East sour grades due to the negative spread between Brent quotes and Dubai prices.
Brent-Dubai Exchange of Futures for Swaps was held on Monday.
The arbitrage opportunity for U.S. crude oil to be shipped to Asia has also increased due to the narrowed spread.
Azouni, who was referring to West Texas Intermediate oil, said that the WTIs were very affordable compared with other grades.
TotalEnergies, he said, buys 10 or more cargoes a month of U.S. Crude and exports 1 million barrels of oil per day to Asia and Europe.
He said that the global oil supply in 2026 will be dominated by Latin America. TotalEnergies, which will produce oil in Suriname within two years, will plateau production at 200,000 barrels per day.
(source: Reuters)
