Spot premiums for Azerbaijan's Azeri BTC crude oil have surged to multi-month highs of over $10 per barrel against dated Brent for late-September and October-loading cargoes, driven by escalating supply risks in the Middle East and the Black Sea, trade sources said.
The surge in differentials comes as headline global crude benchmarks hovered above the $100-a-barrel mark for the first time since mid-May, supported by rising attacks on key Middle Eastern maritime corridors that have stoked fears of prolonged supply disruptions.
Last time Azeri BTC premiums jumped over $10 per barrel was in April this year a few weeks into the Iran war, LSEG data shows.
Azeri BTC, which loads from Turkey's Mediterranean port of Ceyhan, has long served as a staple feedstock for European refiners. However, tightening Middle Eastern availability has prompted refiners in Asia—predominantly in China and India—to aggressively secure alternative light-sweet barrels from the Mediterranean and Atlantic Basin.
"There is no oil in the market. Asian refiners are aggressively buying on spot markets worldwide, pushing prices up," said one trader involved in the Azeri BTC market.
Azeri BTC crude oil exports from Ceyhan have been set at 15.7 million barrels in October compared with 15.1 million barrels in the September plan, the schedule seen by Reuters showed on Wednesday.
Adding to the pressure, are recent drone attacks targeting Russian Black Sea port infrastructure, which have disrupted rival export flows, further boosting demand for loadings out of Ceyhan, according to two trading sources.
Under normal market conditions, the bulk of Azeri BTC heads to Italy's port of Trieste, where it feeds refineries in Italy, Germany, and the Czech Republic via the Transalpine (TAL) pipeline, according to traders and LSEG shipping data.
The heavy pull of late-September and October volumes toward Asia is expected to curtail supply available to European refiners, potentially forcing regional plants to scramble for alternative, costly substitute grades.
(Reporting by Reuters in MOSCOW, reporting by Robert Harvey in LONDON, editing by Alexandra Hudson)