Singapore — Dubai crude's discount to Brent widened as the global crude complex rose after comments from the US and Saudi Arabia over the weekend intensified their rift with Iran.
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The Brent/Dubai Exchange Futures for Swaps spread rose to $3.43/b as of 11 am in Singapore (0300 GMT) Monday, up from $3.10/b at the close of trading on Friday.
Backwardation at the front of the Brent curve also strengthened as markets evaluated statements from US President Donald Trump and Saudi Crown Prince Mohammed bin Salman over the weekend regarding a recent spate of attacks near the Strait of Hormuz.
The August/September Brent futures spread tightened to $1/b backwardation as of 0300 GMT Monday, compared with 85 cents/b at 4:30 pm Singapore time on Friday (0830 GMT).
Meanwhile, the same spread on Dubai swaps also rose, but at a slower pace than for Brent. Dubai August/September swap clocked in at 52 cents/b Monday morning, compared to 44 cents/b on Friday 4:30 pm at the close of Asian trading -- almost half of the rise in Brent spreads.
In an interview with Saudi-owned Ashraq Al Awsat newspaper published on Sunday, the crown prince said the kingdom does not want a war in the region but "will not hesitate in dealing with any threat to our people, sovereignty and vital interests."
Saudi oil minister Khalid al-Falih also called for a swift and decisive action towards "the threats to oil supplies, market stability, and the confidence of consumers," following the attacks on oil tankers in the region, according to a tweet from the Saudi oil ministry.
Trump and other senior US officials blamed Thursday's attacks on Iran. US officials released a video on Friday purportedly showing Iran's Revolutionary Guards removing a mine from one of the tankers damaged on Thursday. The veracity of the video has not been independently verified and Iran has denied the allegations.
"Iran did do it and you know they did it because you saw the boat," Trump told Fox News, calling Iran "a nation of terror." Iranian foreign minister Javad Zarif took to Twitter in reaction to US allegations, calling them "sabotage diplomacy."
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