First exported VLCC from Louisiana Offshore Oil Port arrives in China: In the LOOP

The first VLCC to directly load a cargo at the Louisiana Offshore Oil Port arrived at the port of Huizhou, China, on Sunday.

The Shaden departed LOOP on February 18 after a loading time of about five days. The Saudi Arabian-flagged VLCC is owned by Bahri and took approximately two months to reach its final destination on the east coast of China, according to S&P Global Platts vessel-tracking software cFlow. Prior to arriving at Huizhou, the Shaden had previously stopped at Rizhao, China, on April 17.

Shell loaded Mars onto the Shaden, with Unipec reportedly taking the crude to ports in China.

As the only US Gulf Coast export facility that does not require Aframax or Suezmax vessels for reverse lightering on to a VLCC, LOOP is poised to become a major export hub in coming years.

Month on month, the Dubai/WTI swap spread has widened 97 cents, putting second-month Dubai at a $1.43/b premium over front-month WTI. As the spread widens, WTI-based sour grades produced in the US Gulf become more competitive with Dubai-based Middle Eastern sour grades in export markets, including those in Asia.

The assessed value of Mars reached a 10-month low February 6, when it was assessed at WTI cash minus $1.65/b. Since then, the grade has increased $1.55 its current assessed value of WTI cash minus 10 cents/b. Strong export demand from Asia has helped boost the price of Mars in recent weeks, with that demand expected to continue, according to market sources.

The 'In the LOOP' Americas crude oil wrap runs each Monday in Crude Oil Marketwire, North American Crude and Products Scan and on the Platts Global Alert. You can read the FAQ: USGC LOOP Sour crude here and find the full special report LOOP Sour Crude: A benchmark for the future here. Also be sure to download our LOOP app(opens in a new tab) by searching for 'Platts LOOP' in your app store.