The Brent/Dubai Exchange of Futures for Swaps, a key indicator of ICE Brent crude futures' premium to benchmark cash Dubai crude, fell to a near one-month low of $3.23/b at the 0830 GMT close of Asian trade Tuesday.
The last time the EFS was lower was on May 31, when it was assessed at $3.17/b, S&P Global Platts data showed.
The recent volatility in Brent crude futures prices stemming from the recent OPEC/non-OPEC meet, as well as escalating trade tensions between the US and China, have pressured down the EFS, market sources said.
"Flat price and spreads are slipping ... This is pressing EFS lower," a Singapore-based broker said, referring to the prompt ICE Brent futures contract.
Prices of front-month ICE August Brent crude futures were highly volatile over the past week ahead of the OPEC/non-OPEC meeting held at Vienna on June 22 and 23.
"Saturday's OPEC press conference may weigh on Brent prices and deferred timespreads early this week if the market focuses on the 1 million b/d [supply increase] headline," Goldman Sachs analysts said in a note over the weekend.
Timespreads for Brent crude futures have been narrowing, given the pressure for the front-month contract.
The first-month/second-month spread stood at 14 cents/b at 0830 GMT Tuesday -- the lowest since May 31 where it was at minus 22 cents/b, Platts data showed.
Middle Eastern benchmark Dubai crude contract on the other hand, has been supported by strong seasonal demand, market sources said.
Refineries are back from their turnarounds and there is stable demand at the moment, they added.
The second-month August Dubai swap on Tuesday was assessed at $71.91/b as of 0830 GMT. The second-month Dubai swap was previously higher on June 14, at $73.18/b, Platts data showed.
Meanwhile, sources also noted that the US' pressing customers of Iranian crude oil in Japan and Europe to zero out their imports by November 4 could further support the Middle East crude benchmark as buyers look for alternatives within the region.
"Lesser oil production from Iran could mean higher flat price," a Singapore-based crude trader said.
US diplomats have visited Japan and Europe to explain the sanctions rollout and will soon travel to China and India, a senior State Department official said Tuesday during a background briefing with reporters.
The US will also work with its "Middle Eastern partners" in a week or so to "ensure that the global supply of oil is not adversely affected by these sanctions," the official added.
The EFS as of 0545 GMT Wednesday was bid at $3.21/b and offered at $3.30/b on the Intercontinental Exchange.
