Oil set for sweet-sour rebalancing
The unusual premiums sour grades have enjoyed over sweet may be coming to an end
An imbalance in sweet-sour crude supply has been a key feature of the oil market since 2017. But fundamentals and price spreads suggest the historically elevated value sour grades have held relative to sweet may finally get eroded. The altered sweet-sour dynamic over the last three years or more has been driven not only by Opec+ cuts and US sanctions on Iran and Venezuela, reducing the availability of sour grades, but also the growth of US shale, boosting supply of sweeter barrels—and transforming the quality of the marginal barrel entering the market. This imbalance has impacted trade flows, with growing US exports to Europe and Asia. And it has also disrupted price differentials, including
Also in this section
27 March 2024
Oil producers have to untangle the increasingly complicated relationship with their natural resources
26 March 2024
Strategic stocks have become as much a market management tool as a security of supply buffer, and this new tactic is likely to continue beyond the next election
25 March 2024
Low carbon intensity and sizeable projects such as Johan Castberg coming onstream in late 2024 suggest a robust outlook at least until 2030
22 March 2024
And the outlook for the country’s upstream appears to have improved following legal setbacks in 2023