Russian Crude Gains Premium Amid Middle East Uncertainty

Oil prices have seen an increase due to diplomatic efforts showing little progress in resolving the Middle East conflict. Asian buyers are seeking alternatives to Middle Eastern crude, concerned about disruptions through the Strait of Hormuz.

Traders say Russian Far East ESPO Blend crude is now trading at a premium of up to $1 per barrel to ICE Brent due to strong Chinese demand and uncertainty over oil supplies from the Middle East and Iran. This is the first time since June that ESPO Blend has traded above parity with Brent.

Chinese refiners, both independent and state-owned companies, have been actively buying ESPO Blend cargoes, pushing out Indian buyers who were unable to secure October allocations due to Chinese demand snapping up all available volumes.