Register with us today

and in less than 60 seconds continue your access to:Latest news headlinesAnalytical topics and featuresCommodities videos, podcast & blogsSample market prices & dataSpecial reportsSubscriber notes & daily commodity email alerts

Already have an account?

Log in to register

Forgot Password

Please Note: Platts Market Center subscribers can only reset passwords via the Platts Market Center

Enter your Email ID below and we will send you a link to reset your password.

  • Email Address* Please enter email address.

If you are a premium subscriber, we are unable to send you a link to reset password for security reasons. Please contact the Client Services team.

If you are a Platts Market Center subscriber, to reset your password go to the Platts Market Center to reset your password.

In this list
Oil | Petrochemicals

Feature: Asia's ample US crude imports in H1 unlikely to rattle OPEC producers

Coal | Thermal Coal | Electric Power | Emissions | Renewables | LNG | Oil | Crude Oil | Refined Products | Metals | Non-Ferrous | Coronavirus

Market Movers Asia Oct 26-30: China's five-year plan, SIEW 2020 in focus

Petrochemicals | Olefins | Polymers

Platts Global Polyolefins Outlook

Commodities | Oil | Crude Oil | Marine Fuels

Marine Fuel Strategy Seminar (at MEEPEC)

Oil | Crude Oil | Refined Products | Fuel Oil | Gasoline | Petrochemicals | Aromatics

Crude falls on bearish API data, concerns over coronavirus restrictions

Feature: Asia's ample US crude imports in H1 unlikely to rattle OPEC producers


Asian refiners find WTI, Eagle Ford no longer competitive

Middle East producers poised to recoup Asian market share in H2

China may maintain ample US flows due to Phase 1 trade deal commitment

Singapore — Asia's high volume of US crude imports in the first half 2020 could prove a false alarm for OPEC+ producers fretting over their shrinking share of the Asian demand pie following the coronavirus pandemic, with several Asian refiners planning to cut US crude purchases in H2 as WTI increasingly proves much more expensive than Middle Eastern grades.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

Asia's overall crude oil imports fell sharply in the first few months of 2020 as economic activities slowed down due to restrictions to contain the spread of COVID-19, but demand for US crude remained robust.

Asia's biggest US crude customer, South Korea, imported 53.76 million barrels from the US over January-April, up 34% year on year, latest data from state-run Korea National Oil Corp. showed.

Thailand boosted its US crude imports over January-April to 145,460 b/d from 82,988 b/d barrels a year earlier, while Taiwan - Asia's second biggest US crude customer last year - raised its US imports by 2% year on year in the first quarter to 166,746 b/d.

However, Asia's ample US crude intake does not reflect attractive US-Asia arbitrage economics or a full recovery in Asian oil demand, as the spot trades for the US cargoes received to date this year were concluded before the pandemic, refinery officials and trading desk mangers across Asia told S&P Global Platts.

Typically, spot trades for US crude are concluded at least 3-4 weeks before the cargo loading dates. It also takes around 45-60 days for a VLCC to reach the Far East from the US Gulf Coast. This means that the bulk of the US crude that arrived in Asia over January-April was the result of deals concluded in Q4 2019, refinery officials at South Korea's SK Innovation and GS Caltex said.

Refiners across Asia rushed to secure adequate supply of low sulfur refinery feedstock late last year to ramp up supply of IMO-compliant clean marine fuels, refinery sources said. Shipowners had started stockpiling low sulfur fuel oils in late 2019 as a hedge against a lack of fuel availability and poor quality fuels ahead of the IMO's 0.5% sulfur cap on marine fuels from January 1.

Despite the onset of the global coronavirus pandemic at the start of the year, major bunkering hubs worldwide likely saw their bunker fuel sales rise in the first few months of 2020 due to strong demand for LSFO. Bunker fuel sales for April in Singapore in particular rose on year as shipowners secured larger stems of LSFO amid the collapse in crude oil prices, industry officials said.


Asian refiners said US crude imports could recede from Q3 as they no longer find WTI, Bakken and Eagle Ford grades attractive, potentially enabling Middle Eastern producers to lift their sales to Asia when OPEC+ members roll back the coalition's output cut agreement to 7.7 million b/d after July.

Platts data showed the spread between WTI Midland on a CFR North Asia basis and Abu Dhabi's Murban on an Asia delivered basis has averaged $2.96/b to date in Q2, widening from 54 cents/b in Q1 and 11 cents/b in Q4 2019. The spread between WTI Midland and Iraq's flagship Basrah Light on an Asia-delivered basis has averaged $1.95/b to date in Q2, widening from $1.48/b in Q1 and $1.35/b in Q4 2019.

Despite the latest hike in Saudi OSP differentials for July-loading cargoes bound for Asia, many refiners would continue to favor Persian Gulf cargoes over US export grades, including WTI Midland and Eagle Ford, due to the prevailing high long-haul freight rates.

The VLCC rate for the USGC-Singapore route has averaged $35.33/mt to date in H1, sharply higher than $29.97/mt in H2 2019 and $17.64/mt in H1 last year, Platts data showed.

"It was only a year or so ago when WTI was trading at a discount of as much as around $10/b to Dubai. US crude is not attractive at all for Q3 deliveries," a trading source at Thailand's PTT said.

South Korea may start reducing shipments from the US in Q3 due to higher costs, officials at SK Innovation and GS Caltex said. The country's refiners paid an average of $46.44/b for crude imported from the US in April, higher than the $30.30/b average paid for Saudi and $21.62/b for Kuwaiti crudes, according to latest KNOC data.


It is not all doom and gloom for US crude suppliers as China has stepped up purchases of North American oil in recent trading cycles in an effort to comply with the Phase 1 trade deal with Washington struck in January.

China has committed to buy $18.5 billion more of US energy products in 2020 than it bought in 2017, and $33.9 billion more in 2021 over 2017 levels, with expectations of similar levels through 2025.

Regardless of the arbitrage economics, Chinese refiners may need to extend their US crude buying spree for the remainder of the year if Beijing intends to fulfil the $18.5 billion energy purchase agreement amid current low oil prices.

China did not import any US crude in 2020 until May 12, when a cargo of Alaska North Slope arrived in Shandong province, but its US crude imports are poised to rise sharply in coming months.

Trade flow tracker Kpler data showed China is set to receive more than 2.82 million mt of US crude in July. The bulk of the Q3 arrival cargoes have been purchased by China's independent refiners, according to Shandong-based refinery officials.