Will Asia Open its Doors to U.S. Crude Oil in 2019?
Thursday, 28 May, 2019
In brief:This infographic, published by S&P Global Platts, shows that US crude flows to Asia reached 940,000 b/d in 2018.
To see a large version of the infographic click here
Amid tight supplies from OPEC members Iran and Venezuela, Asian refiners are looking for alternatives, and US oil could help fill the gap.
The US, which is the world’s largest oil producer, should help plug the gap in a tightening oil market. Asian refiners have started to cultivate a taste for US oil, as they start to sweeten their crude slate and diversify their supplies. US crude is also increasingly becoming more price-competitive in the Asian refining hubs, pulling more sweet crude East. S&P Global Platts Analytics expects US crude exports to rise to 2.8 million b/d in 2019, from 2 million b/d in 2018. Asia could account for at least 50% of those volumes.
Southeast Asia looks set to take US crude oil on a regular basis, with Vietnam and Indonesia making their very first purchase of light sweet WTI crude in recent weeks, signaling that the buyers are also keen to take advantage of favorable US-Asia arbitrage economics.
The majority of US crude flows to Asia have been directed to refiners in South Korea, Taiwan, India and Japan over the past few quarters, though Southeast Asia has so far provided limited outlets for US crude suppliers and traders.
This infographic explores export data and key factors influencing US crude flows to Asia.