Asian buyers have scooped up the most US oil in three years, as the Strait of Hormuz crisis spurs a hunt for alternatives to Persian Gulf crude.
A flurry of purchases in recent days has taken the amount of Asia-bound American oil to be loaded in April to about 60 million barrels, according to traders familiar with the deals, who asked not to be named. That’s the most for a month since April 2023, data from Kpler Ltd. and Vortexa Ltd. show.
The closure of Hormuz because of the war in the Middle East between the US, Israel and Iran has hit Asian nations that are heavily reliant on oil from the Persian Gulf particularly hard, spurring refinery run cuts and a ban on fuel exports in China. US drillers in the world’s biggest oil producer are among the beneficiaries of the resulting upsurge in demand and jump in prices, although costlier crude and fuels stand to be a drag for consumers.
One of the shipments, to Taiwan, was priced at a $12-to-$13 a barrel premium to Dated Brent, the traders said. Others were pegged about $18 a barrel above the Dubai marker, although the big swings in benchmarks this week have complicated the pricing process, they said. That compares with $5-to-$6 barrel premiums over Dubai in similar deals done last month, before the war.
There’s also been a surge of activity in the shipping market, with shipbrokers reporting a spike in vessel bookings and associated costs. There’s so much US crude needing to be shipped that traders are even turning to smaller Aframaxes, instead of the typical supertankers – very large crude carriers that can hold 2 million barrels – for deliveries on the route to Asia.
Traders said about two-thirds of the month’s roughly 60 million barrel tally will be loaded onto VLCCs, while the rest will go on smaller vessels, including Aframax and Suexmax tankers.
While substantial, the inbound volume of US oil won’t provide Asian refiners with a near-term fix to the crisis, however. Shipments loaded in April typically won’t reach their destinations until about two months after that.
Buyers included refiners in Japan, South Korea, Taiwan, Singapore and Thailand, the traders said. The headline figure could go higher still, as the window to purchase US April-loading cargoes remains open for a short while.
Overall, the US usually exports around 110 million barrels a month, with about half going to Europe and more than a third heading to Asia, according to Kpler and Vortexa. Asian buyers took around 35 million barrels of American oil in each of the first two months of this year.
