Physical Oil Cargoes Surge Past $130 as Saudi Supply Disruptions Bite
European physical oil cargoes topped $130 a barrel on Tuesday, nearing April's record, after Saudi Arabia cancelled late-September shipments to Europe and Libya halted output at three fields.
Prices for some physical oil cargoes in Europe climbed above $130 a barrel on Tuesday, approaching record highs set in April, as buyers sought alternatives to Middle East supplies facing mounting disruptions from an intensifying regional conflict.
Saudi Arabia has cancelled late-September cargoes to European buyers after an attack last week on its East-West Pipeline forced it to suspend loadings from Yanbu, a key Red Sea port, according to trade sources. The move added to supply disruptions linked to the Iran war.
Buyers responded by bidding up potential alternatives such as North Sea oil. North Sea Forties crude jumped to $136.75 a barrel, according to LSEG data, closing in on the all-time high of $147.37 reached on April 13, shortly after the Iran war disrupted Middle East exports.
Oil futures also rose by more than $3 on Tuesday, with the Brent contract approaching $110 a barrel. The gains followed the Saudi loadings suspension and news that Libya had halted operations at three oil fields, deepening concerns that supply-route disruptions could persist for weeks.
Physical cargo prices typically exceed crude futures such as Brent because they are for delivery within a few weeks, earlier than the oil traded in futures markets. The nearby Brent futures contract is for November delivery.