Brent-Dubai oil price gap to remain negative, TotalEnergies exec says

The price gap between Brent and Dubai crude is expected to remain negative due to strong demand for heavier Middle Eastern oil, despite increasing supplies from OPEC nations, a TotalEnergies executive said on Monday.

Rahim Azouni, TotalEnergies' senior vice president of trading and shipping, was speaking at the APPEC conference in Singapore a day after OPEC+, which includes the Organisation of the Petroleum Exporting Countries plus Russia and other allies, agreed to further raise oil production from October.

"Clearly, the market is looking for heavier grades today...That's why we see the Brent-Dubai going negative," he said.

"We see this trend continuing despite OPEC adding more crude to the market," he added.

A negative spread between Brent and Dubai quotes has made sweet grades more attractive for Asian refiners relative to Middle East sour grades.

On Monday, Brent-Dubai Exchange of Futures for Swaps (EFS) narrowed 12 cents to 47 cents per barrel.

The narrowed spread has also opened the arbitrage for US crude to head to Asia.

"You have the WTIs landing very cheap compared with the alternative grades," Azouni said, referring to West Texas Intermediate crude.

He said TotalEnergies buys more than 10 cargoes of US crude every month and trades more than one million barrels per day (bpd) of the oil to Asia as well as to Europe.

Looking ahead, global oil supply will be driven mainly by Latin America in 2026, he said, adding that TotalEnergies will be producing oil in Suriname in two years' time, with production to plateau at 200,000 bpd.

(Reporting Florence Tan, Siyi Liu and Trixie Yap; Writing by Nidhi Verma; Editing by Sonali Paul)