September North Sea crude exports are down a whopping 18% on the month, to 600,000 b/d, and 120,000 b/d lower than September 2021.Demand for incremental barrels in Europe is focusing on light, sweet crude to minimize processing costs and maximize shipping fuel yields.The market tightness and resulting disconnect between the physical price and the future price has dramatically increased basis risk for buyers. Save for later Print Download Share LinkedIn Twitter The North Sea crude trade is thriving on regional demand for spot oil and the high profitability of very low-sulfur fuel oil (VLSFO). Refiners buy this short-haul and low-sulfur North Sea crude to save on processing costs, mitigate price backwardation, and bolster protection against the price disconnect between physical and future prices. Processing costs have gone up fast after fresh spikes in the natural gas price have increased the cost of hydrogen, a workhorse of desulfurization and secondary conversion for refiners. Low-sulfur North Sea grades minimize costly treatment and produce lots of VLSFO.