OREANDA-NEWS. Two cargoes of Emirati crude oil are heading to Europe in a rare arbitrage move as European refiners try to find cheap alternative sour oil after tight supplies pushed up prices on key grade Russian Urals, shipping and trading sources said.

 Phibro sold a 1 million-barrel cargo of medium sour Upper Zakum to Litasco for August delivery into Europe, traders said, adding moving this particular Emirati grade to Europe was rare.

 Total had also sold a 1 million-barrel cargo of light sour Murban for August loading to the Mediterranean, they said.

 High prices on Europe-destined sour crude coupled with weak demand for sour crude in Asia has opened a price gap over the last month, which has allowed these movements.

 "Sours are still weak in the east, while in the Mediterranean there has been an acute shortage," one regional trader said.

 Urals has rallied in recent weeks to an all-time high on various factors, including Russia diverting flows from Europe to China and to Russian domestic refiners to meet summer demand.

 The shift in Russian flows is felt more acutely as the market must already do without Iranian and Syrian crude, which are cut off due to western sanctions.

 The two Emirati shipments follow another arbitrage movement of Omani crude to the Mediterranean. Trafigura sent a 1 million-barrel cargo, which arrived at Huelva in Spain at the end of June.

 European refiners are struggling due to a weak economy, rising competition from new Middle East refineries and lower U.S. products demand.

 Since 2009, some 1.8 million bpd of European capacity has been mothballed and more is expected to be shut in.

 As a result, they are particularly vulnerable to high prices and periodically must cut runs when margins turn negative, making cheap Gulf barrels particularly appealing to now expensive medium sour Russian Urals.