Guyanese crude differentials maintain multi-year lows amid punitive freight environment

Values across the Guyanese medium crude complex have fallen and maintained multi-year lows as narrowing arbitrage prospects driven by prohibitive freight costs out of the region keep differentials under pressure for the December-trading cycle.

Platts, part of S&P Global Energy, assessed Unity Gold FOB unchanged at a $2.70/b discount to Dated Brent Nov. 5 and Golden Arrowhead at a $2.50/b discount, with both values at the lowest on record since Platts launched the assessments in August 2023 and 2025, respectively.

Payara Gold FOB maintained its lowest differential against Dated Brent since December 2023 at a discount of $2.60/b, while Liza FOB found its lowest value since January 2023 at a discount of $2.90/b to Dated Brent.

Market participants have attributed the pressure on values to elevated freight rates for key Suezmax routes, resulting from a tight tonnage supply, which keeps landed values uncompetitive relative to local grades in destinations such as Europe and Asia.

Offers have found little buy-side interest during recent Americas trading sessions, with traders reporting offer levels for December loading cargoes as "pretty strong [right] now," noting that "there are quite a lot of cargoes [still] available," said one buyer for Chinese refineries.

Though Thailand's PTT refinery was heard to have purchased a December loading cargo of Golden Arrowhead from multiple market sources, one Europe-based trader said, "[Figuring out the arbitrage] is really complicated now that neither China nor India is buying what they were expecting to buy."

The November-trading cycle had also seen some Guyanese cargoes heading East with 2 million barrels of Golden Arrowhead being sold into an IOC tender for Dec-Jan delivery, and another 2 million barrels made up of Liza and Unity Gold crudes sold into India's HPCL for Dec-Jan delivery as well.

This flow eastwards is unusual and seemingly indicates that differentials for the Guyanese barrels have been competitive enough to attract Asian interest, despite the typical destination for Guyanese cargoes being in Europe, according to S&P Global Energy data.

The market will be watching to see if more volumes head East in the December cycle, as key arbitrage indicators seem to remain favorable so far despite weakness in the Dubai complex.

In discussing the current freight rates' impact on Johan Sverdrup and competing sweeter grades coming into Europe, one Europe-based trader said, "It's obviously bad for [Johan Sverdrup's] FOB differential, but it's also shutting arbs into Europe... that said, arb grades like Guyana seem to be compensating with lower FOB differentials."

The Brent/Dubai Exchange of Futures for Swaps contract -- a derivative representing the perceived premium of Brent-linked Atlantic Basin crude over East-of-Suez Dubai-linked crude and a key arbitrage indicator – has been on a downward trajectory in recent sessions.

A narrower Brent/Dubai spread can make Atlantic Basin crude more economical for Asian buyers -- Platts assessed the front-month Brent/Dubai EFS at minus 3 cents/b at the London close Nov. 5. This is only the sixteenth pricing session this year in which the contract has been assessed in the negatives, and it remains below its year-to-date average of 91 cents/b.