U.S. Crude Oil Exports to Asia Poised to Hit Record High
November 3, 2022 | World | No Comments|
Deliveries of U.S. crude oil to Asia are set to touch a record 1.8 million barrels per day this month, Kpler shipping data showed, as demand climbed on a widening discount to global oil. Refiners in China, India and South Korea are returning as big U.S. crude oil buyers after several months of scooping up cheap Russian barrels. Asia’s renewed buying reflects soaring demand for crude to produce diesel fuel and comes as Europe continued to stock up in the aftermath of Western sanctions on Russian purchases.
Overall, U.S. crude exports last week touched a weekly record of 5.1 million barrels per day (bpd), boosted by higher shale production. The U.S. benchmark West Texas Intermediate (WTI) traded at a nearly $9 a barrel discount to global Brent, compared to a $6 discount at the start of September. A wider discount makes U.S. oil more affordable to foreign buyers.
South Korea is set to import a record 619,000 barrels per day (bpd) of U.S. crude oil, according to Refinitiv, becoming the month’s top Asian importer of U.S. crude. China will draw at least 450,000 bpd, its highest since December 2020 while India’s demand is forecast to be the highest since March, Refinitiv data showed. Both are rising in the face of higher tanker rates up about 40% on some segments in October.
China’s refineries are stepping up production with the end of maintenance overhauls and receipt of higher fuel export quotas to lift sagging merchandise exports. Graphic: U.S. crude deliveries to Asia set to touch a record in November. There is also strong global demand for diesel that is encouraging refiners across the region to add production runs, said Matt Smith, analyst at data firm Kpler.