Saudi attack prompts return of US-China crude flows

Uncertainty surrounding near-term crude supplies from the Middle East is encouraging Chinese refiners to step up US oil purchases for November-December arrival despite a new 5pc tariff on US crude imports that is diverting more prompt cargoes.

The VLCC Amundsen departed the Corpus Christi lightering area mid-week and is expected to arrive in Kingston, Jamaica, around 23 September, according to vesseltracking data. The tanker had previously been seen placed on subjects by WTI exporter Occidental Petroleum for a September trip to China, marking the ninth US crude cargo that has been redirected since the US-China tariff dispute brought forth a 5pc levy on US crude shipments to China, effective at the beginning of this month .

The VLCC Yuan Qiu Hu has meanwhile been placed on subjects by Total subsidiary Atlantic Trading and Marketing to depart the US Gulf coast around 15 October for South Korea. Mercuria had originally planned to charter the vessel from the US to China in mid-September.

But expectations of tighter supplies from leading oil producer Saudi Arabia on the back of this week's attacks on two key production fields has boosted prices for regional alternatives to Asia-Pacific, prompting the scheduling of at least three October-loading VLCCs destined for China so far this week.

Saudi Aramco's US subsidiary Motiva on 16 September made plans to load the VLCC Maran Aphrodite at the US Gulf coast around 24 October for a trip to Ningbo, China. Chinese state-controlled Sinopec's trading arm Unipec placed the similarly sized New Solution on subjects to leave the US for China on 25 October, and Chevron is planning to take a Bahri-owned VLCC from the US Gulf coast to Ningbo starting 15 October, according to shipping fixture reports seen by Argus .

Related News