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The
purchases could lift in September the volume of U.S. crude
loading for Asia, up from a 4-year low in the previous month
when strong U.S. crude prices curbed exports, Refinitiv Eikon
data showed.
Other grades such as West Texas Intermediate (WTI) and West
Texas Light (WTL) that regularly head east are also being booked
for Asia, the sources said.
Ongoing production restraint by Middle East producers and a
delayed return of Iranian barrels to international markets have
also contributed to the rise in Asian buying interest for U.S.
high-sulphur crude, they said.
One South Korean refiner has bought 3 million barrels of the
sour grade while Unipec, the trading arm of Asia's largest
refiner Sinopec, has taken at least 2 million barrels, the
sources said.
Unipec has chartered the supertanker Cosnew Lake to load sour
crude from Louisiana on Sept. 23, according to two sources and
Refinitiv Eikon data. The company is also looking to fix a
Suezmax vessel for departure in early September, shipbrokers
said. Earlier this week, Taiwanese refiner Formosa Petrochemical
Corp had issued a tender to buy Mars crude but did not award it
due to high offers.
There are still 2 million to 4 million barrels of Mars crude
that have yet to trade and these could potentially come to Asia,
said a Singapore-based trader.
"U.S. crude has become quite cheap relative to the rest of the
world and U.S. exports have picked up because of it," said Scott
Shelton, an energy specialist at United ICAP.
Mars Sour crude's discount to U.S. crude futures widened in late
July to the most since April 2020, but has since narrowed due to
the rise in export demand, traders said. Mars traded at the
smallest discount to benchmark futures in 6 weeks on Tuesday.
"We have been seeing sours bid east very aggressively," one
U.S.-based source at a top exporter said.
"I think there are still good refinery runs, despite the China
COVID noise and SPR stuff," he said, referring to reports about
China releasing crude stocks from strategic petroleum reserves (SPR)
and concerns about the recent lockdowns in China to curb the
coronavirus Delta variant cutting its oil demand.
Asia's purchase of Mars crude has partly depressed prices for
competing supplies from the Middle East such as Iraq's Basra
crude which are trading at discounts, traders said.
(Reporting by Jessica Resnick-Ault and Devika Krishna Kumar in
New York, Florence Tan in Singapore and Nidhi Verma in New
Delhi; Additional reporting by Heekyong Yang in Seoul; Editing
by Richard Pullin and Michael Perry)
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