The Red Sea diversion has shifted from a one-off shock to a fixed cost. Cape of Good Hope routings burn more bunker, tie up more capacity and carry higher war-risk premiums, so freight on Middle East and West Africa long-haul cargoes into Asia has stayed elevated.

Short-haul grades look better in that light. ESPO loads from Far East ports and reaches China in days; Lula comes from Brazil's east coast on a leg shorter than the traditional Middle East line. The saved voyage drops straight into the delivered netback and offsets part of the official premium and insurance uplift.

This matters for SNSUC's seven-grade book: the old comparison was Dubai/Oman official selling-price discounts, but now "freight per barrel times days at sea" has to be folded into delivered cost. Short-haul grades hold a structural freight advantage; long-haul Middle East grades must balance premium against freight.

The conclusion is not complicated — once freight becomes a near-constant rigid outlay, the arbitrage contest shifts from "who has the lower official price" to "who is shorter in mileage and faster to discharge." Nearby grades like ESPO carry more strategic value than their paper discount suggests.