The prices of dirtier and more sulfurous oil varieties in Asia are surging, a significant shift that deviates from the usual premium commanded by lighter crudes. This trend provides further evidence that Saudi Arabia's extended supply cuts are effectively tightening the market.

Traders and data compiled by Bloomberg reveal that the value of medium-sour crudes, which are more sulfurous and dense, has surpassed that of lighter, higher-quality oils like Abu Dhabi's Murban. This reversal in pricing dynamics is observed in both physical and futures markets.

While benchmark crude prices experienced a decline in the first half of the year, Saudi Arabia's commitment to rebalancing the global market by reducing supplies, in coordination with other OPEC+ members including Russia, is now yielding tangible results. Brent crude surpassed $80 per barrel last week for the first time since May, prompting traders to seek out medium-sour crudes that have been more significantly impacted by the production cuts.

In the physical market, cargoes of Upper Zakum for September loading have been discussed at a premium of over $1.80 per barrel to the Dubai benchmark. In contrast, Murban was valued slightly above $1.80 on the ICE Futures Abu Dhabi platform on Friday. In futures trading, front-month Oman surpassed Murban last week.

Furthermore, some refinery outages in Japan, coupled with earlier purchases of lighter crude from the United States, are expected to dampen the demand for grades like Murban, according to traders.