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Hormuz disruption drives Asian refiners to buy more U.S. crude
Reuters reports at least four Asia-based refiners increased U.S. crude purchases this week, including multiple November deals priced at premiums versus relevant benchmarks.
Asian refiners have stepped up buying activity for U.S. crude as the Strait of Hormuz remains effectively closed amid the U.S.-Iran stalemate, Reuters reports. The shift is aimed at securing alternative supply if Middle Eastern crude is not able to move outbound through the chokepoint. According to Reuters, tanker and shipping traffic through the Strait of Hormuz has fallen further, based on observable transits. That has pushed refiners in North Asia to look further afield for crude, supported by tight fuel markets and very high refining margins that encourage refinery runs. The report cites several transactions tied to the new sourcing strategy. GS Caltex of South Korea bought 2 million barrels of Mars crude from Shell for November delivery, paying a premium of $13 to $14 above the Dubai benchmark for October, Reuters trade sources said. Other deals mentioned include Cosmo Energy Holdings in Japan buying Mars crude from Trafigura, and Eneos purchasing 2 million barrels of WTI from Trafigura for November delivery at a premium of more than $10 per barrel above October WTI. Reuters also notes Taiwan’s CPC Corp acquired 2 million barrels of WTI via a tender at a premium of about $8 to $9 per barrel to Dated Brent.
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