US oil exports to Asia are set to hit record highs as the cost of the supplies gets cheaper, report says
- Deliveries of US oil to Asia are set to hit 1.8 million barrels a day this month, Reuters reported.
- Demand for American crude has jumped as the supplies become cheaper.
US oil exports to Asia will hit record highs this month as the discount between American and other crude benchmarks widens, according to Kpler data cited by Reuters.
The data shows the US will send 1.8 million barrels of crude to countries in Asia in November as demand for diesel fuel soars ahead of the winter, Reuters reported Thursday.
Chinese, Indian, and South Korean refineries have all stepped up their purchases of American oil exports, which are trading at a significant discount to supplies from other sources.
WTI crude currently trades for $9 a barrel less than Brent crude, and the discount has deepened from $6 a barrel in September, according to Reuters.
Asian countries have moved quickly to pivot to American oil imports after spending months loading up on cheap Russian crude.
South Korea has led the charge for American supplies and is set to import an all-time high of 619,000 barrels a day next month, according to Refinitiv, while India is set to buy its highest number of US barrels since March.
China will also import 450,000 barrels a day for its highest tally since December 2020, Refinitiv data showed. Its refineries are upping their crude oil production after Beijing increased its fuel export quotas to 15 million tonnes for 2022 in a bid to boost trade.
US oil exports are also benefiting from recent OPEC+ production cuts, according to one analyst. The cartel's members agreed last month to slash production by 2 million barrels a day in a bid to build up surplus supplies and boost prices.
"With Asian refiners set to ramp up refinery runs, with China's sizeable product export quota, and with OPEC's core producers dialing back on output, demand for U.S. crude is strong," Kpler analyst Matt Smith told Reuters.