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SINGAPORE/NEW YORK - Asia is set to ramp up crude oil imports from the United States in late 2017 and early next year, with buyers searching out cheap supplies after hurricanes hit U.S. demand for the commodity at a time of rising production in the country.
As many as 11 tankers, partly or fully laden with U.S. crude, are due to arrive in Asia in November, with another 12 to load oil in the United States later in October and November before sailing for Asia, according to shipping sources and data on Thomson Reuters Eikon.
U.S. West Texas Intermediate crude benchmark
"Between November and January, there is a very big volume of U.S. crude heading to Asia," said a Chinese trader who has bought 4 million barrels of medium-sour U.S. oil to arrive in December. He declined to be identified as he was not authorised to speak with media.
The price-spread between the two crudes had already pushed U.S. crude exports to a record 1.98 million barrels per day by late September, according to the Energy Information Administration in the United States.
Exports in the next two to three weeks could hit 2.2 million bpd, Marco Dunand, chief executive of trading house Mercuria, said last week. br>
That has also been driven as some Asian governments look to diversify supply sources and reduce trade surpluses with the world's top economy. India joined China, Japan and South Korea when it imported its first U.S. crude in October.
And high premiums for Middle Eastern grades of crude are also stoking Asian appetite for U.S. supplies.
"U.S. medium sour grades can replace most Middle East grades and the light sweets may replace some African crude," said the Chinese trader.
DESTINATION ASIA
The tankers to arrive in Asia in November include eight Very Large Crude Carriers (VLCC), capable of carrying 2 million barrels of oil each, and three Suezmaxes that can load half that volume, according to shipping data in Eikon.
China remains the largest buyer with four tankers, followed by three to South Korea and two to India. The remaining two could head to Singapore, the data shows.
Unipec, the trading arm of Asia's largest refiner Sinopec
Another 12 tankers are provisionally chartered to load U.S. oil in October and November, the data showed.
Four of these are supertankers chartered by South Korean buyers to load Mexican and U.S. crude. The country's top refiner SK Energy
Several Indian refiners have also purchased their first U.S. crude for delivery in the fourth quarter, including the country's largest refiner Indian Oil Corp
Japan's largest refiner JXTG Holdings
(Reporting by Florence Tan in Singapore and Catherine Ngai in New York; Additional reporting by Jane Chung in Seoul and Osamu Tsukimori in Tokyo; Editing by Joseph Radford) ((Florence.Tan@thomsonreuters.com; +65 6870 3497; Reuters Messaging: florence.tan.thomsonreuters.com@reuters.net))