Asian refiners increase Middle Eastern crude purchases as supplies recover
Orders for US crude arriving in November fell roughly 50%, while major Middle Eastern producers lowered prices for Asian customers.
Refiners in Japan, China and Thailand have increased or resumed purchases of Middle Eastern crude as supplies recover following months of conflict, according to traders familiar with the transactions. The traders, who requested anonymity, said more oil was arriving from the United Arab Emirates, Saudi Arabia and Qatar.
Some shipments must pass through the still-contested Strait of Hormuz. Tanker traffic and energy infrastructure were targeted early in the war between the US and Iran, which began in February. Saudi Arabia subsequently reported a sharp October production increase to Opec.
Regional producers have also lowered prices for Asian customers. Saudi Arabia reduced its official selling prices to a six-year low, while the United Arab Emirates cut the premium on December deliveries of its flagship crude grade.
Asian orders for November deliveries of US crude dropped roughly 50%, reaching 24 million to 26 million barrels, traders told Bloomberg. Port of Corpus Christi chief executive officer Kent Britton separately said none of 40 crude cargoes leaving US Gulf Coast ports during the preceding week was heading to Asia.
Earnings per day for very large crude carriers sailing from the US Gulf fell 61% from their October peak. The corresponding decline for Persian Gulf voyages to East Asia was 24%.
China's October crude imports reached nearly 42 million tons, a seven-month high, with Iraqi cargoes leading purchases, according to official customs figures. Kpler data showed India's Persian Gulf imports had overtaken those from Russia.
