The sharp falls on outright Brent crude prices has opened up the arbitrage for the export of crudes from West Africa and possibly even the North Sea to Asia, dealers said yesterday. Yesterday's drop of over $2 a barrel in Brent prices crunched the Brent/Dubai spread to around $1.45 a barrel from $2.70 a week ago.

But traders said that as much of the West African barrels for October had been
placed, players looking to exploit the window might be hard pressed to get their
hands on wet barrels.

"The outright prices have slumped sharply and so all Dated Brent based grades
are cheap," one regular supplier to the Asian market said.

They said Asian refiners, which have previously foregone October West African
barrels due to poor economics, were back in the market on the lookout for prompt

"The Korean refiners have already bought up the paper hedges but whether that's
for a West African cargo or North Sea is not clear but more likely they will go
for WAF first," a trader said.

Traders said they expect a late increase in the shipment of October West
African crude to Asia as a result of the change in the price structure.
Asian refiners had curtailed their purchases of October West African crudes
with exports estimated at 500,000 barrels per day, the equivalent of eight very
large crude carriers (VLCCs), down from 800,000 bpd in September. Among the
players which had bought or were expected to ship cargoes to Asia include,
Sinochem, Indian Oil Corp, Chinese Petroleum Corp, Pertamina and Petroleum
Authority of Thailand.

Sinochem, which has two Cabinda cargoes, has yet to decide on what it would do
with the crude but the barrels were expected to head East, dealers said.

Traders said they expect at least another three VLCCs to be added to this list
with the buyers to include Sinopec and Kangqi which have bought a combination of
Nigeria, Angola and Eqitorial New Guinea crudes.

They said Tawain's CPC and Thailand's PTT could also raise their purchases of
West African crudes as a result of the lower spreads.

Traders said North Sea producers, struggling to place out prompt barrels, might
also take advantage of the narrow spread and ship an odd cargo or two to Asia.
They said there were still 4-5 Norwegian cargoes available for end September
lifting, including Ekofisk, Draugen, and Statfjord.

North Sea grades' differentials have fallen by around 30-40 cents since the
start of the week, on top of the hefty flat price drops, as sellers struggled to
find homes for barrels stretching from month's end to the first half of Oct.
Traders said the last time a North Sea cargo was sold in to Asia was in May
when South Korea's largest refiner SK Corp bought 1.7 million barrels of Norway's
Troll crude.

Norway's Statoil has crude storage capacity in South Korea totalling around
1.13 million barrels which traders said the producer could use.