West African crude oil differentials hold steady amid demand concerns

West African crude oil differentials have remained steady on Wednesday due to demand concerns stemming from recent price rises caused by disruptions in Middle East supply and increased freight costs, according to a trade source. Nigerian crude grades, such as Bonga and Forcados, are currently valued at around $6 higher than dated Brent, according to price reporting agencies.

However, some buyers are hesitant to purchase at this elevated price point. Freight rates for major routes transporting West African crude have hit multi-year highs in August, aligning with the levels observed at the beginning of the U.S.-Israeli war on Iran, as reported by Riverlake data. These rates have since seen a slight decline.

Uganda announced its blended crude oil grade, Pearl Sweet, on Wednesday, with the East African nation planning to commence commercial oil production by the end of the year.