ME Oil Benchmarks at 15-Month High as Sanctions on Russia Widen

Middle East crude oil benchmark premiums surged on Monday to their highest since October 2023, propelled by strong demand from Asia.

Chinese and Indian refiners are scouring the globe for supplies of crude as fresh U.S. sanctions on Russian producers and tankers curb shipments to Moscow's top customers, traders said.

Cash Dubai's premium to swaps rose US$1.35 to US$3.08 a barrel, representing the biggest daily gain since September 2020 at least. Oman and Murban premiums rose to US$2.90 and US$3.10 a barrel respectively.

"The market is very strong," one trader said, adding that Chinese refiners were looking to buy crude oil from the Middle East, Latin America and Western Africa on Monday.

Shipping rates for very large crude carriers (VLCC) from the Middle East to China have risen by about 10% since Friday, another trader said.

The U.S. Treasury on Friday imposed its broadest package of sanctions so far, targeting oil and gas revenue used by Russia to fund its war with Ukraine.

It imposed sanctions on Gazprom Neft and Surgutneftegaz as well as 183 vessels that have shipped Russian oil, many of which are in the so-called shadow fleet of ageing tankers operated by non-Western companies.