Global Prices Turn Topsy-Turvy as Scorned Crudes Become Dear - Bloomberg

Global Prices Turn Topsy-Turvy as Scorned Crudes Become Dear - Bloomberg:

Some of the world’s dirtiest and densest crudes traditionally spurned for being too difficult to process are having a moment in the sun, with a little help from Donald Trump.

“Heavy-sour” oil from nations such as Venezuela and Iraq have a higher sulfur content and are more viscous than “light-sweet” grades pumped in U.S. shale fields and Europe’s North Sea. While the dirtier crudes could usually be bought for a steep discount versus the easier-to-refine types, they have strengthened dramatically over the past few weeks. At least two varieties have flipped to a premium.

Their unusual strength has its source in U.S. policy: America’s effective ban on Venezuelan oil has forced Gulf Coast refiners to scramble for alternatives from elsewhere. Trump’s decision to reimpose sanctions on Iran has also shrunk Middle East supplies, most of which are of “medium-sour” quality that are still heavier than light crudes. Cargoes from the region are further being squeezed as Saudi Arabia bears the bulk of output cuts by OPEC.