In a significant move, Qatar Energy has raised the price for term cargoes of al-Shaheen crude oil scheduled for November, marking the highest level seen in 2023.
In a significant move, Qatar Energy has raised the price for term cargoes of al-Shaheen crude oil scheduled for November, marking the highest level seen in 2023. This development comes in the wake of Saudi Arabia’s extension of its output cut until the end of the year, exacerbating the scarcity of sour crude in the market.
The November price has been established at approximately $2.73 per barrel above Dubai quotes, a notable increase from October’s $2.10 per barrel, and represents the highest point since December 2022.
This surge in price is attributed to Saudi Arabia’s recent decision to prolong its unilateral production cut of 1 million barrels per day until the conclusion of 2023. This move has led to an uptick in spot premiums for sour crude oil. Simultaneously, strong refining margins have encouraged refiners to escalate their production levels.
Furthermore, the increase in the al-Shaheen term price coincides with a decrease in the total number of al-Shaheen crude cargoes available for trade in November, dropping from 16 in October to 13.
The determination of the term price followed Qatar Energy’s successful sale of three al-Shaheen cargoes for November-loading through its monthly tender. Noteworthy participants in these transactions included Idemitsu, ExxonMobil, and Shell, who acquired the cargoes at a price range spanning from $2.20 to $2.77 per barrel above Dubai quotes. These cargoes are slated for loading on November 2-3, November 24-25, and November 28-29.
Qatar Energy‘s strategic pricing decisions signal an adaptation to the evolving global oil market landscape, with a focus on optimizing returns amidst changing supply dynamics. The heightened prices for al-Shaheen crude in November underscore the delicate balance of supply and demand, reflecting the broader trends in the oil industry.
The al Shaheen Oil Field is a production oil and gas field located off the northeast coast of Qatar, 80 kilometers north of Doha, above the North Gas Field, one of the world’s largest gas fields.