Asian refiners are on course to nearly double their purchases of US crude for September from a month earlier, a move that stands to squeeze domestic (US) fuel makers at a time when Americans are already facing record high pump prices.
Exports to Asia should see a notable rise next month, according to ship and commodity tracking companies Kpler, Vortexa and Sparta Commodities. Traders estimate that the total amount of US-to-Asia trades for loading in September is more than 40 million barrels compared with a forecast 22 million barrels in August. The increase comes as prices of competing Middle Eastern grades like Abu Dhabi’s Murban crude have surged, making US supply more competitive.
Also read: The Hormuz crude volume debate masks the real shortage of refined fuels
At least one of the recent purchases was for oil to be loaded on a smaller Aframax tanker capable of taking a quicker route via the Panama Canal and Pacific Ocean, rather than the Atlantic Ocean. That suggests a degree of promptness in Asia’s demand, traders familiar with the recent business said.
As the war in Iran stretches into its sixth month with no deal to reopen the Strait of Hormuz, the Asian buying spree puts strain on US supplies, likely pushing up prices. Domestic refiners are already running near record rates and plan to maximize output into the fall. Higher crude costs tend to filter down into pump prices, and seasonally gas prices are already at a record high. More Asia buying will likely also divert supplies away from Europe.
