According to industry sources, Chinese and South Korean refiners have purchased at least 5 million barrels of U.S. Mars crude taking advantage of lower prices in recent weeks.
Ongoing production restraints by producers in the Middle East as well as a delayed return of Iranian barrels to international markets have contributed to a rise in Asian buying interest for U.S. high-sulphur crude, said sources.
“A South Korean refiner has bought 3 million barrels of the sour grade while Unipec, the trading arm of Asia’s largest refiner Sinopec, has taken at least 2 million barrels,” said a source.
According to two sources, Unipec has chartered Cosnew, a supertanker, to load sour crude from Louisiana. The company is also looking to fix a Suezmax vessel for departure in early September, said shipbrokers.
“U.S. crude has become quite cheap relative to the rest of the world and U.S. exports have picked up because of it,” said Scott Shelton, an energy specialist at United ICAP.
Mars Sour crude’s discount to U.S. crude futures widened in late July since April 2020; however it has since narrowed due to the rise in export demand, said traders.
Earlier this week on Tuesday, Mars traded at the smallest discount to benchmark futures in 6 weeks.