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US oil floats to top as Asia looks for Middle Eastern alternatives amid Iran war
Buyers from Japan, South Korea, Singapore and Thailand have helped push May sales to over 60 million barrels, the highest in three years
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Asian refiners have grown increasingly reliant on US crude as oil-starved fuel makers scour the globe to replace Middle Eastern supply and stave off shortages that could ripple through the broader economy.
Buyers in Japan led the charge to purchase May-loading cargoes from the US early in the month, with South Korean, Singaporean and Thai processors also among customers, said traders familiar with the matter. At least 60 million barrels of grades from the US Gulf were bought for loading next month, in line with the tally for loading in April, according to the traders. That was the highest level in three years.
The war in Iran and near closing of the Strait of Hormuz, now in its seventh week, has choked off crude flows to Asia and thrown its refining industry into disarray. The US and Iran are mulling a two-week ceasefire extension, but a blockade from both sides remains in effect.
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A fuel-making crisis in Asia has already trickled down to everyday consumers and the broader economy, with some governments moving to cut demand, airlines dropping flights and shortages threatening industry.
Most of the US oil headed to Asia would be loaded onto very large crude carriers, known as VLCCs, which carry around 2 million barrels of crude, and some smaller tankers are also used. These include Aframax tankers, which can traverse the Panama Canal for a quicker journey to East Asia across the Pacific Ocean.
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