Oil from Dodgy Origins with a 40% Discount for US Traders:

  • Bloomberg reported that US energy traders are being offered crude oil with uncertain origins at a steeply discounted price.
  • According to the report, one middleman offered upto 200,000 barrels high-sour crude at a $30 price reduction compared with West Texas Intermediate. 
  • Bloomberg reported that traders said they had passed on super-cheap crude because they were unsure about the source. 

According to reports, energy traders in Houston have been offered to purchase crude oil with uncertain origins at steeply discounted prices. Bloomberg

According to the report one pitch offered up-to 200,000 barrels high-sour crude at a $30 discount on West Texas Intermediate, which was trading at $71.81/barrel on Thursday.

Bloomberg reported that documents claiming that the oil was Mexican heavy residual were provided by a middleman, but that the oil contained a different amount of salt, nickel, and vanadium than typical Mexican crude. Bloomberg reported that Pemex, Mexico’s state-run oil company, also had a virtual monopoly in Mexico’s crude oil sales.

Bloomberg reported that two other traders in Houston received similar low-cost offers. However, the potential customers declined because they had doubts about the oil’s origin.

These offers are rare in America, where regulators closely monitor the market to ensure that there are no sanctions violations. 

Globally, there are still a lot of sanctioned barrels coming from Russia, Iran, and Venezuela. Bloomberg and EIA data show that these three countries may export more than 4 million barrels per day of discounted oil.

Analysts noted that a large “shadow fleet” was created to transport Russian oil and avoid new sanctions and a price cap which took effect this week.  

Currently, Russian central bank officials are forecasting “new economic shocks”Thanks to the $60-per barrel price cap for Russian crude. 

A Kremlin spokesperson stated that Moscow has condemned the West’s price cap and sanctions measures and is still working to respond to them. Wednesday. There are two possible ways to counter the price cap: ban oil sales to certain countries or set a maximum price discount on its flagship Urals crude oil against Brent.

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