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Two North Sea crude oil grades are making their first journey to eastern markets, highlighting the region’s appetite for incremental supply from more irregular sources to help offset reduced volumes from elsewhere.
Vortexa data show that an Aframax of heavy UK North Sea Kraken is travelling through the Suez Canal, while a VLCC of medium Norwegian North Sea Grane crude is heading towards China—both said to be the first voyages of their kind.
North Sea grades Kraken and Grane have found favour in Asia-Pacific at a time when medium and heavy crude availability is additionally tighter due to Opec and non-Opec’s commitment to production cuts, while competitive freight rates and firm oil products demand also lend support the unusual arbitrage movements.
In the case of Kraken, it is the first export of the grade to an East of Suez destination, after the grade began production at the field mid-last year. The cargo is travelling aboard the AframaxBritish Resource, which took on its cargo via ship-to-ship (STS) transfer from the SuezmaxNavion Oceaniaat Scapa Flow, offshore Scotland, at the end of February.
Since the field came online, Kraken has remained in the wider European region, and in recent months found increased favour with US Gulf coast (PADD 3) refiners, amid a decline in heavier crude supply from Latin American producers, especially Venezuela.
China meanwhile is expected to receive a cargo of medium Norwegian Grane crude—a first for the region, market participants say. The cargo loaded from Sture and is travelling aboard the VLCCGener8 Hera. It is due to arrive at Ningbo at the beginning of April.
China’s intake of North Sea crude in recent years has mostly focused on benchmark grades Forties and Ekofisk. The country sources a large portion of its medium/heavy sweet supply from Angola, which since the beginning of the year has seen a decline in its overall exports.