U.S. crude loadings for Asia are set for a three-year in April as Asian refiners are accelerating buying of American oil to partially offset the loss of supply from the Middle East, traders with knowledge of recent purchases told Bloomberg on Thursday.
About 60 million barrels of American crude grades are set to be loaded for Asia next month, according to Bloomberg’s trade sources, as Asian refiners are scooping up non-Middle Eastern supply from all other regions since the de facto closed Strait of Hormuz has trapped most of the crude production in the Gulf.
The purchases have also been made at steep premiums over Dated Brent as Asia scrambles to replace part of the barrels from its key sourcing region, the Middle East.
The U.S. Midland crude remains competitively attractive into Asia against the Murban grade from Abu Dhabi, given how constrained supply from the Persian Gulf remains, Kpler said in an analysis earlier this week.
“That matters even more as buyers look beyond prompt coverage into May and June runs,” Kpler noted.
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Japanese refiners have boosted purchases of U.S. crude, with about 3 million barrels of Midland fixed for April loading, according to market sources who spoke to Kpler.
“Reserve releases from Japan and South Korea should help cover near-term shortages rather than eliminate the need for imports altogether,” the energy intelligence firm noted.
As the shock to supply from the Middle East doesn’t appear to end soon, Asian refiners are boosting arbitrage buying, including from the United States, Kpler’s Senior Crude Oil Analyst, Muyu Xu, says.
Japanese refiners are likely buying at least 13 million barrels of U.S. WTI and Mars for April-loading, potentially the highest monthly level on record, according to Xu.
Thailand’s PTT is said to have bought March-loading North Sea Forties and Angolan crude, while South Korea’s GS Caltex purchased two April-loading cargoes of Kazakh-origin CPC Blend, according to Argus Media.
Chinese refiners, meanwhile, have placed orders for at least 9 million barrels of April-loading West African crude on top of the term volumes and continue to buy up March- and April-loading Brazilian crude, Kpler’s Xu notes.
By Michael Kern for Oilprice.com
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