Johan Sverdrup crude reaches record high amid strong Med demand

The differential of Norway's Johan Sverdrup medium sour crude reached a record high against benchmark Dated Brent Oct. 4, amid rising purchases of the grade in the Mediterranean to make up for a shortfall of Kurdish and Iraqi crude exports from the Turkish port of Ceyhan, market sources said this week.

Platts, part of S&P Global Commodity Insights, last assessed Johan Sverdrup at a $3.94/b premium to Dated Brent Oct. 4, marking an all-time high for the grade, already in high demand in Northwest Europe.

The key Iraq-Turkey pipeline that carries crude to Ceyhan has been shuttered since March 25 following an international arbitration ruling, withholding nearly 500,000 b/d of Kurdish Blend Test and Kirkuk crude from the Mediterranean market.

Since the closure, Baghdad and Ankara have been wrangling over the terms of financial penalties to be paid and other matters. Turkey also said the pipeline was damaged by earthquakes in February and that repairs have only recently been completed.

The pipeline is a key source of sour crude for refineries in the Mediterranean market, which has also this year been deprived of Russian Urals crude following the EU's embargo on Russian oil.

Some 204,000 b/d of September-loading Johan Sverdrup discharged in the Mediterranean, equivalent to about a quarter of the overall loading program, according to S&P Global Commodities at Sea data.