Oil from questionable origins with a 40% discount is being offered to US energy traders, report says
- US energy traders are receiving pitches for steeply discounted crude with unclear origins, Bloomberg reported.
- One middleman offered up to 200,000 barrels of heavy-sour crude at a $30 markdown vs. West Texas Intermediate, per the report.
Energy traders in the Houston area have received pitches to buy steeply discounted crude oil with uncertain origins, according to Bloomberg.
According to the report, one pitch offered up to 200,000 barrels of heavy-sour crude at a $30 discount to West Texas Intermediate, which was trading at $71.81 a barrel on Thursday.
A middleman had documents that said the oil was Mexican Heavy Residual, but the amount of salt, nickel and vanadium that it contained didn't match typical Mexican crude, Bloomberg reported, pointing out that state-run oil giant Pemex also has a virtual monopoly on Mexico's crude sales.
Two other traders in the Houston area told Bloomberg they received similar cheap offers. But the potential customers passed due to doubts about the oil's origin.
Such offers are rare in the US, where regulators keep close tabs on the market to ensure there are no sanctions violations, according to the report.
Still, the oil market globally is awash in sanctioned barrels from Iran, Venezuela and Russia. Those three nations combined may be exporting over 4 million barrels a day of discounted oil, according to Bloomberg and EIA data.
Analysts have noted that a vast "shadow fleet" of ships was assembled to move Russian oil and skirt new sanctions and a price cap that took effect this week
Meanwhile, officials at Russia's central bank are forecasting "new economic shocks" thanks to the $60-per-barrel price cap on Russian crude.
Moscow has denounced the West's price cap measure and sanction measures, and is still working on a response to the restrictions, a Kremlin spokesperson said Wednesday. Possible counters to the price cap may include banning oil sales to certain nations or setting a maximum price discount for its flagship Urals crude against Brent.
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