Argentina's Oil Exports Surge as Refiners Seek Alternative Supplies

Asian refiners are increasing their purchases of Argentinian crude in response to the ongoing Iran war, which has disrupted supply from the Middle East and driven up competition for barrels from other regions.

The Medanito oil grade, extracted from Argentina's Vaca Muerta shale formation, is comparable to US West Texas Intermediate and is being sought after by processors in Japan, South Korea, and China.

At least one cargo of Medanito oil was loaded earlier this month, with loading dates stretching over August to October. Japanese refiners Eneos Holdings Inc and Taiyo Oil Co have made their first purchases of the grade, while South Korean Hyundai Oilbank Co, Chinese major PetroChina Co, and Shaanxi Yanchang Petroleum are also buyers.

The appeal of Medanito oil lies in its lower price compared to similar-quality WTI, with a discount of around $1 to $2 per barrel. Additionally, the oil is transported around the southern tip of South America before crossing the Pacific Ocean to Asia, avoiding chokepoints such as the Panama Canal and Suez Canal.

Argentina's exports to Asia have averaged a record 35,000 barrels per day this year through July, more than five times the average in 2025. The country is boosting drilling for Medanito oil under the administration of libertarian President Javier Milei, who is overseeing a revival of the energy sector.