The Johan Sverdrup field in Norway reached a price of $19.55 per barrel on September 15, marking the highest recorded level since the field's evaluation began in 2019. This price increase represents a rise of $7.265 per barrel compared to the previous day and is recorded as the largest daily increase in the history of this field.
Reasons for Price Increase
This significant price increase was due to disruptions in competitive flows to Europe and the willingness of refineries to use Johan Sverdrup crude oil as a suitable alternative close to other supplies. Assessments indicate that the price of Johan Sverdrup is currently $19.55 per barrel higher than the Dated Brent price on September 15.
The previous price of this field was $16.745 per barrel, recorded on April 14. These price fluctuations are likely due to increasing concerns about geopolitical risks and oil exports from the Gulf.
Market Developments and Their Impacts
Given the high demand for sour crude oil in Europe for the October trading period, traders have been paying attention to market conditions since early September. Additionally, transportation risks in the Strait of Hormuz and a strengthening Asian market have led to reduced supplies to Europe.
Moreover, reported delays by traders in loading oil shipments from the Middle East allocated to Europe have impacted the increased demand for the Johan Sverdrup field. The temporary closure of the East-West pipeline in Saudi Arabia on September 11 also significantly affected the North Sea crude oil market, forcing European refineries to purchase this crude oil.
As a result, traders have estimated the price of Johan Sverdrup shipments for loading in October to be above $20 per barrel, although exact loading dates are still unclear.
In the trading session on September 15, Equinor also made an offer to purchase a shipment from the Johan Sverdrup field at a price of $19.55 per barrel. This offer remained at the end of London trading, indicating high demand for this field.
Recent positive experiences in the Johan Sverdrup crude oil market are likely to continue, as one sour crude oil trader in Europe stated, "The lack of suitable alternatives for Johan Sverdrup crude oil" will lead to increased demand in the short term.
