European refiners switched to expensive Russian sour Urals crude after US sanctions hit Venezuela’s similar-grade exports.
Experts said that even though US crude output is increasing and exports are due to soar later this year, it is not an alternative because American crude is mostly light and sweet, and European refineries are equipped to process heavier grades to make refined products, for example diesel fuel.
As a result, the refineries are already competing to secure as much sour Urals crude as they can, in a complete reversal of the traditional differential between light and heavy oil to the levels which have not been in place since 2013.
It was echoed by another source underscoring that “all refiners are looking for Urals or a Urals replacement” and that “we see that it won’t be enough for everyone”.
