Asian refiners eye increased Canadian, Latin American crude supply, discounts

East Asian refiners anticipate increased availability of Canadian and Latin American heavy crude cargoes in the Far Eastern market in 2026, as suppliers from the Americas seek to boost sales in Asia amid sluggish demand from US Gulf Coast refineries.

Washington and Caracas have reached an initial agreement for the sale of 50 million barrels of Venezuelan oil, a move that could reduce US reliance on heavy sour crude from Canada, Brazil, Mexico, Colombia and Equador.

As US refineries' demand for those grades declines, affected suppliers are expected to offer more cargoes to Asian buyers, according to the first-quarter market analysis report from Korea National Oil Corp. and feedstock managers at Thai, South Korean and Japanese refiners during market discussions with Platts, part of S&P Global Energy, over Jan. 21-Feb. 12.

On a four-week basis, US imports of Venezuelan crude rose 21,000 b/d to 131,000 b/d, while the four-week rolling average for Canadian crude flows into the US fell 27,000 b/d to 3.9 million b/d, US Energy Information Administration data show Feb. 11.

The four-week average of Colombian crude imports fell 34,000 b/d to 176,000 b/d, while Ecuadorian crude imports decreased to 68,000 b/d from 92,000 b/d over the same period, according to EIA data.

More Canadian and Latin American heavy sour crude spot cargoes for April and May arrivals have been offered in the Asian market, as buyers await improved offers and lower price differentials, feedstock managers at Thai, South Korean and Japanese refiners -- including PTT and ENEOS -- told Platts over Feb. 4-12.

"US control of Venezuelan crude supply is expected to bring noticeable changes to the supply of heavy crude in both Asia and North America," KNOC said in its analysis report. "This examines how the shift in Venezuelan crude sales could affect the heavy oil markets of those regions."

Among recent spot market deals concluded in the Asian market, a South Korean refiner based in Ulsan bought 550,000 barrels of Canadian heavy sour Cold Lake crude for May arrival at ICE Brent minus $4.20/b on a CFR basis. The refiner confirmed the spot trade directly to Platts on Feb. 12 but requested that its company name remain undisclosed.

Another South Korean refiner based in Ulsan confirmed to Platts on Feb. 12 that it purchased a Suezmax cargo -- about 1 million barrels -- of Brazilian heavy sour Buzios crude for May arrival.

South Korea -- Asia's third-biggest crude buyer -- imported 30.9 million barrels of Brazilian crude in 2025, up 30.5% from 2024, the latest KNOC data show.

Discounts

If the price is sufficiently attractive and suppliers are willing to offer discounts in the Asian market, Japanese refiners would be keen to increase the proportion of Latin American and Canadian crude in their overall crude slate, as the country relies heavily on Middle Eastern grades, according to feedstock managers at ENEOS and Cosmo Oil.

Japan imported 8,146 b/d of Colombian Castilla Blend crude in December 2025, compared with zero intake a year earlier, while shipments of Ecuadorian Napo crude during the month rose 18.4% year over year to 53,184 b/d, the latest data from the Ministry of Economy, Trade and Industry issued on Jan. 30 show.

Meanwhile, South Korean and Thai refineries are well-acquainted with Brazilian heavy sweet and sour crude grades and may increase their intake of Tupi and Buzios crude, provided the feedstock economics remain competitive with staple Middle Eastern grades, refinery feedstock managers in Ulsan, Bangkok and Seoul told Platts.

Platts assessed the spread between Brazil's flagship Tupi crude and the Middle Eastern benchmark cash Dubai at an average of minus $2.40/b in February as of the 11th, compared with January's average of minus 32 cents/b.

Regarding Canadian crude recently traded and offered in the Asian market, a cargo of Access Western Blend, or AWB, crude for May arrival was sold at a discount of more than $5/b to ICE Brent futures, according to sweet and sour crude traders in Singapore with direct knowledge of the matter.