MOSCOW, March 17 (Reuters) - Prices for Caspian oil grades, Kazakhstan's CPC Blend and Azerbaijan's BTC, surged this month as supply shortages triggered by the Iranian war pushed premiums for the oil
Caspian oil grade premiums surge vs Brent amid Middle East supply disruptions, traders say
Rising Premiums for Caspian Crude Grades in the Mediterranean Market
MOSCOW, March 17 (Reuters) - Prices for Kazakhstan's CPC Blend and Azerbaijan's BTC crude have jumped this month as supply shortages linked to the Iranian war pushed premiums in the Mediterranean oil market well above the dated Brent benchmark, traders said.
Oil and petroleum product prices in Europe have risen since the start of the month as Middle East disruptions forced refiners to seek alternatives to regional grades to keep fuel output steady.
Key Caspian Grades and Their Role in European Supply
CPC Blend and Azeri BTC have been flowing mainly to the Mediterranean and Europe in recent months, helped by proximity and their value for European plants.
CPC Blend Premiums and Market Dynamics
CPC Blend cargoes loading in March and April traded at premiums of $1-2 per barrel to dated Brent last week, reversing recent discounts of up to $5 per barrel, market sources said.
Factors Affecting CPC Blend Exports
Exports of the grade have been disrupted in recent months by bad weather, drone attacks in the Black Sea and operational problems at Kazakhstan's Tengiz oilfield.
Most April-loading CPC Blend cargoes had already traded as of March 17, traders said, with only a few late-April parcels still on offer.
"CPC Blend is one of the grades Mediterranean refiners hope to rely on amid supply disruptions in the Middle East, but unfortunately its loadings are also rather unstable," a trader in the European market said.
Unstable loadings pushed CPC Blend to record discounts last month, but improved exports have lifted April premiums.
Risks and Constraints for CPC Blend
Loadings have also been hit by attacks on tankers in the Black Sea. Over the weekend a Greek-managed tanker bound for the CPC terminal was struck by an unidentified object and suffered minor damage. Those risks, together with rising freight and insurance costs, are keeping CPC premiums from climbing further, traders said.
Azeri BTC Stability and Premium Increases
Meanwhile, Azeri BTC exports have remained stable. Premiums for the light, sweet grade have risen sharply amid tight supply in Europe, with April cargoes trading at premiums of $5-6 per barrel or higher, up from about $4 per barrel last month, traders said. Some cargoes changed hands at premiums as high as $8-9 per barrel as buyers paid up to secure volumes.
(Reporting by Reuters. Editing by Chizu Nomiyama and Mark Potter)
