AgenciesAsia relying on US crude to replace Middle East supply (Representative image) Asian refiners have grown increasingly reliant on US crude as oil-starved fuel makers scour the globe to replace Middle Eastern supply and stave off shortages that could ripple through the broader economy.Buyers in Japan led the charge to purchase May-loading cargoes from the US early in the month, with South Korean, Singapore and Thai processors also among customers, said traders familiar with the matter.
At least 60 million barrels of grades from the US Gulf was bought for loading next month, in line with the tally for loading in April, according to the traders.
That was the highest level in three years.Also Read: Iran war pushes Asia to think twice before doubling down on LNGThe war in Iran and near closing of the Strait of Hormuz, now in its seventh week, has choked off crude flows to Asia and thrown its refining industry into disarray.
The US and Iran are mulling a two-week ceasefire extension, but a blockade from both sides remains in effect.
A fuel-making crisis in Asia has already trickled down to everyday consumers and the broader economy, with some governments moving to cut demand, airlines dropping flights and shortages threatening industry.Live EventsMost of the US oil headed to Asia would be loaded onto very large crude carriers, known as VLCCs, which carry around 2 million barrels of crude, and some smaller tankers are also used.
These include Aframax tankers, which can traverse the Panama Canal for a quicker journey to East Asia across the Pacific Ocean.“We don’t see any available for charter VLCC vessel supply over the next two weeks compared to a 90-day average of four VLCCs typically,” said energy intelligence firm Sparta Commodities crude analyst John Coleman.
“This is likely a leading indicator of strong bookings and a looming export surge” out of the US Gulf Coast.US government data showed exports of oil, including crude and refined products, reaching a record 13 million barrels a day last week.
Of that, crude shipments jumped to more than 5 million barrels a day to reach the highest since September.READ MORE: US Oil Exports Hit Record as War Drives Hunt for Supplies“It’s like every vessel owner right now is thinking: okay, I cannot load in the Middle East Gulf, I....
