Qatar raises April OSPs, issues May Al Shaheen tender

14 Mar 2023

Quantum Commodity Intelligence - Qatar's National Oil Company (NOC) has nudged higher Official Selling Prices (OSPs) for its Marine and Land grades loading in April, following the broader trend of higher OSPs released this month.

QatarEnergy set its Qatar Marine grade for April at a premium of $1/b over Platts Dubai/Oman, up from $0.40/b on March barrels, while Qatar Land was set at +$1.35/b versus +$1.10/b for March.

Since January, Qatar has set OSPs versus Platts Dubai, having previously priced against Platts Dubai/Oman quotes.

The OSPs were largely in line with expectations after Saudi Arabia increased its flagship Arab Light grade to Platts Dubai/DME Oman +$2.50/b for loading next month versus +$2.00/b for March cargoes, while Arab Medium was increased to +$2.50/b from +$1.60/b.

April Saudi Arab Extra Light was set at $2.70/b over Dubai/Oman, versus +$2.25/b this month.

In line with most Middle East crude grades, Qatari cargoes are sold two months forward but priced against assessments published in the month of loading, so OSPs include two months of market structure.

The key M1/M3 Dubai cash spread, closely monitored by Qatar and other Middle East National Oil Companies (NOCs), averaged $2.03/b in February compared to $1.12/b in January, according to Quantum data.

So far in March, the M1/M3 Dubai cash spread has also averaged $2.03/b -- an early indication that Middle East OSPs are heading for only a small change on May-loading cargoes.

Qatar Marine is a medium sour crude (API 32.6, sulfur 1.84%), while Qatar Land is a light-medium crude (API 41, sulfur 1.22%).

Al Shaheen

QatarEnergy also issued a May sell tender for its keenly-watched Al Shaheen grade, with the Middle East medium sour grade expected to sell a slightly below last month’s levels of $2.10-$2.50/b to the underlying Dubai swap.

Qatar is offering four cargoes for May, rather than the usual three, with two on early-month dates and two for late May dates. Bids close on 14 March and remain valid until 15 March.

Traders said the grade is currently valued at $1.90-$2.30/b over Dubai swaps, with the higher number valid for the prompter dates, reflecting market backwardation.

The regular monthly tender from Qatar is seen as a bellwether for the Middle East medium-sour crude market, as the grade is a component of the Dubai 'basket' of crudes, regularly setting the price of Dubai as the lowest of the five deliverable grades into the pricing mechanism.