Asian refiners buy more US crude as Hormuz remains blocked

Synopsis

Asian refiners are buying U.S. crude amid Strait of Hormuz shipping concerns. South Korea's GS Caltex secured two million barrels of Mars crude for November. Japan's Cosmo Energy and Eneos Corp also purchased Mars and WTI crude. Taiwan's CPC Corp bought WTI and West African crude through a tender. India's refiners are also seeking crude supplies for future delivery.

Singapore: At least four Asian refiners bought U.S. ​crude this week, as ​the Strait of Hormuz remained effectively closed and refiners ​sought alternative supplies for delivery later this year, traders said.

Shipping traffic at the Strait of Hormuz fell below the average for this month towards the ‌end of ⁠the week ⁠due to competing U.S. and Iran claims over control of the waterway.

With no ​immediate prospect of a free flow of shipping through the strait, strong refining ​margins amid tight fuel supplies have encouraged refiners to secure crude inventories for the coming months from beyond the Gulf.

South Korea's GS ​Caltex bought two million barrels of ⁠Mars crude from ‌Shell for November arrival. The crude was ​priced at ​a premium around $13-14 per barrel above the October Dubai benchmark, ⁠traders said.

Japan's third-largest oil refiner, Cosmo Energy Holdings , ​bought Mars crude from Trafigura, while Eneos Corp, Japan's ​biggest refiner, purchased 2 million barrels of West Texas Intermediate (WTI) crude from Trafigura for November delivery with a premium over $10 per barrel above the October WTI price.

Taiwan's state-owned CPC Corp bought 2 million barrels of WTI via a tender at a premium of ‌around $8 to $9 a barrel to Dated Brent. CPC also purchased crude from West Africa via the tender, the ​people said.

The ​companies do not ⁠typically comment on commercial deals.

Before the Iran war, Asia sourced more than half of its crude supply from the Middle East. The region ​imported 2.35 million barrels per day crude from the U.S. in July, a record high, according to data by ship tracking firm Kpler.

This week, India's state-run refiners Hindustan Petroleum Corp and Mangalore Refinery and Petrochemicals Ltd also issued tenders seeking for crude.