Asian Refiners Turn to US Crude Amid Hormuz Shipping Disruptions
Asian refiners are snapping up US crude as tensions in the Strait of Hormuz persist. At least four major players have made deals to secure oil for delivery later this year, traders said.
The strait's shipping traffic fell below average towards the end of last week due to competing claims from the US and Iran over control of the waterway.
With no immediate prospect of a free flow of shipping through the strait, refiners are turning to alternative supplies. Strong refining margins amid tight fuel supplies have encouraged them to secure crude inventories for the coming months from beyond the Gulf.
South Korea's GS Caltex bought two million barrels of Mars crude from Shell at a premium of $13-14 per barrel above the October Dubai benchmark, while Japan's Cosmo Energy Holdings purchased Mars crude from Trafigura and Eneos Corp bought 2 million barrels of West Texas Intermediate (WTI) crude from Trafigura for November delivery.
Taiwan's state-owned CPC Corp bought 2 million barrels of WTI via a tender at a premium of $8 to $9 a barrel above Dated Brent, and also purchased crude from West Africa via the same tender.