West African crude oil differentials remained supported on Friday as disruptions linked to the escalating conflict in the Middle East were expected to increase demand for alternative crude grades.
Nigerian grades Qua Iboe and Bonga were heard offered earlier in the week at significant premiums to dated Brent. Qua Iboe was offered at around dated Brent plus $6 a barrel, while Bonga was offered at dated Brent plus $9 a barrel.
However, no deals were reported at those levels, and there were no updated offers heard on Friday.
The strength in West African crude comes as the latest escalation in the Middle East conflict has sent tanker freight rates soaring to record levels, including on routes from West Africa.
Higher freight costs could eventually weigh on demand for West African barrels by increasing the delivered cost of crude to refiners, even as buyers seek supplies from outside the conflict-affected region.
Source: Reuters
Reporting: Alex Lawler
Editing: Tasim Zahid
