Rising prices of Middle Eastern crudes have opened the arbitrage window for West Texas Intermediate (WTI) to flow to Asia, which is set to buy higher volumes of the U.S. crude grade in the coming weeks, trade sources have told Reuters.
Key grades from the Middle East, such as Dubai and Murban, have seen their prices rise in recent weeks on the back of strong demand for high-sulfur crude in Asia and reduced shipments of Murban. Moreover, the prices for Middle Eastern crudes going to Asia have jumped this week amid concerns that the cheap Russian supply, favored by China and India, could see disruptions if U.S. President Donald Trump makes good on his threat to impose “penalties” or secondary tariffs on the buyers of Russian oil.
WTI now undercuts the UAE’s Murban crude, as the price of the U.S. crude hovers at $0.30 to $0.75 per barrel below the price of Murban, according to Reuters’ trading sources.
In early June, ADNOC expected lower export volumes of its flagship Murban crude between August 2025 and May 2026, as it plans to process higher volumes of the grade domestically.
The drop in the Murban volumes for export is chiefly the result of higher processing of the grade at the Ruwais refinery in the UAE amid an optimization in the plant’s feedstock, according to ADNOC.
The company pumping nearly all the crude in one of OPEC’s top producers, the UAE, will lower its Murban crude exports by between 100,000 bpd and 177,000 bpd from September 2025 to May 2026, according to ADNOC’s revised export plans.
Adding to all these factors is the falling freight cost for supertankers to ship crude from the U.S. Gulf Coast to key import centers in Asia including Singapore, China, and India’s west coast, according to tanker rates cited by Reuters.
Asian buyers are thus set to take advantage of the arbitrage and lower freight costs to diversify some of their supply from the Middle East, which currently looks more expensive than the U.S. crude.
By Tsvetana Paraskova for Oilprice.com
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