Asian Refiners Turn to Argentina as Iran War Hits Oil Supplies

Asian refiners have increased purchases of Argentinian crude oil as the ongoing Iran war disrupts supply from the Middle East and drives competition for barrels from other regions.

The Medanito grade, extracted from Argentina's Vaca Muerta shale formation, has seen interest from processors in Japan, South Korea, and China. At least one cargo was loaded earlier this month, with loading dates stretching over August to October.

Japan's Eneos Holdings Inc. and Taiyo Oil Co. recently purchased Medanito oil, the first time the nation's refiners have taken the grade. Other buyers include South Korea's Hyundai Oilbank Co., Chinese major PetroChina Co., and Shaanxi Yanchang Petroleum.

The appeal of Medanito lies in its lower price compared to similar-quality US West Texas Intermediate (WTI) oil, with a discount of around $1 to $2 per barrel. This, combined with the fact that it doesn't need to pass through chokepoints like the Panama Canal or Suez Canal, makes it an attractive option for Asian refiners.