Crude from Norway’s Johan Sverdrup oilfield has started heading to Asia again, a Sverdrup field partner said on Thursday, a flow that had stopped for several months due to a closed arbitrage window and strong demand from Europe.

Sverdrup crude, which made its market debut in late 2019, was initially popular in Asia. The crude later helped to replace some of the Russia barrels lost in Europe due to Western sanctions after Moscow’s invasion of Ukraine in 2022.

Top executives from Aker BP AKRBP.OL, a partner in the Sverdrup field, on Thursday said the arbitrage to Asia was a positive sign for the crude’s market value and they expected strong Sverdrup demand in the months ahead.

“We have seen recently some shipments of Sverdrup going to Asia, which again open the arbitrage that’s been closed for quite a while,” Aker BP Chief Executive Karl Johnny Hersvik said. “That, of course, is a positive indicator for the crude differential.”

Asian buyers warmed to Sverdrup as its price was competitive compared to oil from suppliers such as Oman, Brazil and Angola, and a lower sulphur content makes it easier to refine, traders said. Also, against a backdrop of OPEC production cuts, it allowed them to diversify their sources of imports.

LSEG flows data show a very large crude carrier (VLCC) carrying Sverdrup discharging in China this month and another two VLCCs en route to Asia. These are the first shipments to Asia since April 2023, according to Kpler flows data.

A Singapore-based trader said the arbitrage was briefly opened and the price was cheap, and the arbitrage would only work for 2 million-barrel cargoes on VLCCs.

Sverdrup’s differential to benchmark dated Brent has traded as high as $2.80 a barrel to dated Brent in January, according to LSEG data, up from a more than $2 discount in late 2023, although it has since fallen back.

Last year it was tricky to move Sverdrup to Asia because European demand kept differentials high, said Viktor Katona, lead crude analyst at Kpler, although its recent drop and weaker European demand could encourage more shipments east.

“Right now, we might be on the verge of another arbitrage window opening up,” he said. “The March loading schedule started to trade and not all of February cargoes have cleared yet and VLCC freight seems to be edging lower.”

Source: Reuters reporting by Nerijus Adomaitis and Alex Lawler, additional reporting by Florence Tan and edited by Susan Fenton