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Guyana oil exports hit record high of 432,000 barrels per day – Analytics firm Kpler
REUTERS – Record Guyanese flows are adding to pressure on Johan Sverdrup crude in Europe at a time when refinery maintenance is already reducing demand, forcing values for the Norwegian grade to a 14-month low, according to export data, traders and analysts.
Europe-bound loadings of Guyanese crude hit a record high of 432,000 barrels per day (bpd), according to data from analytics firm Kpler. The South American nation’s crude exports have been bolstered by the new Payara Gold stream, which is very close in quality to Sverdrup and therefore serves as a suitable replacement when price mismatches make the long-haul transatlantic voyage worthwhile for European refiners.
“Inflows from Guyana are weighing on Sverdrup,” said Viktor Katona, lead crude analyst at Kpler. Sverdrup’s price had soared to multi-dollar premiums to benchmark dated Brent at the tail end of last year when Red Sea shipping issues first began to threaten the flow of Middle Eastern sour crude into Europe. But prices have been in freefall since February and touched their lowest since January 2023 at dated Brent minus $3.13 a barrel FOB Norway on March 5th. according to price reporting agency S&P Global Commodity Insights, known as Platts. Reduced overall crude demand in Europe because of springtime refinery maintenance is also pushing Sverdrup lower, two traders said, made worse by the fact that persisting Red Sea shipping issues are impeding sales of the grade to its traditional demand outlet in Asia, causing supplies to swell locally.
“It’s a combination of refinery maintenance in Europe, also the high cost of shipping it to the east, meaning it has to discount locally,” a trader who asked not to be named told Reuters. Norway’s Equinor, which operates the Sverdrup field, sold a cargo of the grade to Shell for late-March delivery at dated Brent minus $2.30 delivered Rotterdam in the Platts window on Tuesday, over $5 below where the company was offering the grade towards the end of January.
“Prices in the market are a function of the supply and demand situation,” Magnus Frantzen Eidsvold, press spokesperson for Equinor, told Reuters. Rising exports of the Norwegian grade in March and April are further adding to pressure, sources said. “Sverdrup is a massive programme and for that to clear there has to be decent demand,” another trade source said. But currently weaker differentials could soon spur a recovery in demand, Kpler’s Katona added.
“Sverdrup differentials will most definitely strengthen once the March programme is all sold and the market realises what an incredible bargain it is.”
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