Which oil grades become more attractive after Saudi attacks?

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Mars Sour Crude Becomes More Attractive Following Saudi Oil Facility Attacks

Following the attacks on Saudi Arabia's oil facilities, Mars Sour crude has experienced a significant increase in demand and trading value. This surge is directly linked to the anticipated decrease in the availability of Arab Light crude, a medium sour grade. The shift in market dynamics has made US crude-linked grades, particularly Mars Sour, more appealing to international buyers.
Increased Demand for Mars Sour Crude

The market has seen a notable uptick in demand for Mars Sour crude, which is considered the benchmark US coastal sour grade. This heightened interest stems from the expectation that supplies of Arab Light crude will diminish due to the disruptions in Saudi Arabia. Traders have observed this trend, leading to a direct impact on Mars Sour's market position.
Widening Premium for US Crude Grades

The attacks on Saudi oil infrastructure led to a substantial jump in global oil prices, widening the premium of Brent crude over US crude futures. This widening gap, reaching as much as US$7.40 a barrel, made US crude, including Mars Sour, a more economically viable option for buyers in Asia and Europe. The US is now exporting over three million barrels per day, with potential to exceed four million bpd.
Stronger Trading Value for Mars Sour

The increased demand has translated into a stronger trading value for Mars Sour crude. Yesterday, Mars Sour traded at US$3.25 over US crude, a significant increase from its US$1.05 position on Friday. This represents the strongest trading performance for Mars Sour in over a month, reflecting its enhanced attractiveness in the current market climate.
Impact on Shipping and Trade Routes

The heightened demand for US crude has also impacted shipping rates for supertankers. Freight rates for Very Large Crude Carriers (VLCCs) from the US Gulf Coast to Singapore saw substantial increases, rising to nearly US$7 million yesterday from US$5.5-6 million on Friday. Similarly, Aframax-class tanker rates to Europe also showed upward momentum, indicating robust activity in transporting US crude overseas.

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Which oil grades become more attractive after Saudi attacks?

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