Norway’s Johan Sverdrup rises over $7/b to an all-time high of $19.55/b

Norway's Johan Sverdrup surged to its highest value on record in the Sept. 15 session, as disruptions to competing inflows into Europe saw refiners pivoting to the medium sour crude as a comparable short-haul replacement.

Platts, part of S&P Global Energy, assessed Johan Sverdrup at a $19.55/barrel premium over Dated Brent Sept. 15, rising $7.265/b on the day to reach its highest value on record since Platts began assessing the grade in 2019. This was also the largest single-day jump on record for the grade.

The previous all-time high was a premium of $16.745/b on April 14, with the momentum at the time driven by mounting geopolitical risk and concerns surrounding exports of Persian Gulf grades.

Tightening sour crude balances across Europe for the October-trading cycle had been noted by traders since the start of September, as shipping risks in the Strait of Hormuz and a strengthening Asian market pulled barrels away from Europe.

Grade-specific interest in Johan Sverdrup had also been driven by trader-reported delays to Middle East-loading cargoes that had been allocated to Europe from the end of August.

Now, traders were reporting that the temporary closure of the East-West Pipeline in Saudi Arabia on Sept. 11 had triggered a buying frenzy in the spot North Sea crude markets as European refiners pivoted to cover volumes.

As a result, traders had pegged values for October-loading cargoes of Johan Sverdrup above the $20/b mark during Sept. 15 afternoon trading, although exact loading dates could not be ascertained.

The Sept. 15 MOC session also saw Equinor bidding for a Johan Sverdrup cargo, left outstanding at a $19.55/b premium at the London close.

Bids for the grade had been seen in every MOC session across Sept. 7-15, with the last trade for the grade seen in the Sept. 10 session -- BP sold a third-decade September loading cargo at a $5.45/b premium to Equinor.

The bullish momentum was expected to continue across the European sour crudes in particular due to "a lack of alternatives" beyond Johan Sverdrup to replace long-haul barrels in the short term, said a Europe-based sour crude trader.