Russian Crude Trades at Premiums Amid Middle East Uncertainty

Russia's Far East ESPO Blend crude is trading at premiums of up to $1 a barrel to ICE Brent due to strong Chinese demand and uncertainty over oil supplies from the Middle East and Iran.

Asian buyers are seeking alternatives to Middle Eastern crude amid concerns that shipments through the Strait of Hormuz will remain disrupted, according to four traders.

The traders noted that ESPO Blend cargoes for October delivery have traded actively, with nearly all volumes sold to buyers at around a $1-a-barrel premium to ICE Brent on a delivered basis into Chinese ports.

This compares to September-delivery cargoes, which traded from a $1-a-barrel discount to parity with ICE Brent last month. The last time ESPO Blend traded at a premium to Brent was in June.