TREE NEWS reports: A rebound in crude flows from the Persian Gulf has driven a sharp drop in the cost of physical crude cargoes, hitting key grades from the Middle East to the North Sea and Africa. One of the market’s core North Sea grades fell to a $1.40 discount to Dated Brent on Monday, down from a premium of more than $20 a barrel just weeks earlier. The shift is being driven by recovering exports from Saudi Arabia and other Middle East producers, which have returned to pre-Iran war levels, alongside easing tanker charter costs.
Persian Gulf crude flows rebound, physical oil prices slump
AI take
The collapse in physical differentials from a premium above $20 to a discount of $1.40 shows how quickly supply normalization can reprice the physical market, far faster than headline futures typically reflect. This matters most for producers moving Gulf and Atlantic Basin cargoes and for refiners who had been paying up for prompt barrels. The open question is whether the return of Gulf exports to pre-war levels holds as tanker economics keep easing, or whether the physical weakness proves a temporary overshoot as cargoes clear.
Generated by AI for reference only.
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