Norway’s Johan Sverdrup crude continues record-breaking run to $11.145/b

Differentials for Norway's Johan Sverdrup continued on a historic bull run as global refiners seek replacements for Persian Gulf crudes, with values for the medium sour grade having broken record highs in every single pricing session across March 11-19.

Platts, part of S&P Global Energy, assessed Johan Sverdrup FOB Mongstad up $1.80/barrel on the day to a $11.145/b premium over the North Sea Dated Brent strip March 19, its highest value since Platts began assessing the grade in 2019.

Differentials have now doubled in value over the last six pricing sessions, having risen $14/b since the end of February.

The global tightness across medium to heavy barrels has seen Atlantic Basin medium crude differentials supported as flows reroute East, with competing barrels from Guyana and West Africa also standing at record highs in recent sessions.

"[With the] Middle East outage [being] heavy barrels, naturally we would expect the substitute grades (Guyana, Angola, Johan Sverdrup, Kirkuk, Mars etc) to rise to reprice the market," said a Europe-based crude trader. "So the JS value does not surprise."

Notably, no Eastern fixtures of Johan Sverdrup have been seen yet, with the boost for the grade coming as European refiners respond to rocketing values on adjacent grades and elevated freight rates on arbitrage barrels into Europe.

The March 19 Platts Market on Close assessment process saw Equinor bidding for cargoes of Johan Sverdrup FOB Mongstad loading across end March and early April, reaching premiums of over $11/b over Dated Brent before being left outstanding at the London close.

In particular, one bid for a cargo loading over April 5-7 failed to attract any selling interest at an $11.30/b premium -- BP sold a cargo with loading across the same laycan to TotalEnergies at a $5.05/b premium in the March 11 MOC session, highlighting the magnitude of the pricing surge.

Traders also reported April-loading cargoes of Johan Sverdrup trading above $10/b premiums in the over-the-counter market during March 19 afternoon trading.

As sour grades across the North Sea complex continue to demonstrate strength, sweet/sour spreads in the region remain inverted at a premium for sour grades, although the momentum on the widening values had ground to a halt with the light sweet complex rallying in recent sessions.

Johan Sverdrup FOB Mongstad was assessed at a $3.47/b premium over Ekofisk FOB Teesside March 19, having fallen back from a record high premium of $3.91/b on March 13 as the sweet segment gained ground.