Asian refiners buy more US crude as Hormuz remains blocked, traders say

Asian refiners increased their purchases of US crude this week as the Strait of Hormuz remained largely inaccessible, prompting a search for alternative supply sources, traders reported. Traffic in the Strait of Hormuz dipped below the monthly average towards the end of the week due to disputes over control between the U.S. and Iran.

With no imminent resolution to the maritime situation, refineries sought to secure crude inventories for the upcoming months from outside the Gulf region. South Korea's GS Caltex acquired two million barrels of Mars crude from Shell, priced at a premium of $13-14 per barrel above the October Dubai benchmark. Japanese refiner Cosmo Energy Holdings also bought Mars crude from Trafigura, while Eneos Corp, the largest refiner in Japan, purchased 2 million barrels of West Texas Intermediate (WTI) crude from Trafigura with a premium exceeding $10 per barrel over the October WTI price.

Taiwan's state-owned CPC Corp bought 2 million barrels of WTI through an auction at a premium ranging from $8 to $9 per barrel compared to Dated Brent. The company also purchased crude from West Africa via auction. The firms generally refrain from commenting on commercial transactions. Prior to the Iran conflict, Asia accounted for more than half of its crude supply from the Middle East, importing a daily average of 2.35 million barrels from the U.S. in July, a record high, according to data from Kpler shipping tracker.

This week, India's state-owned refiners Hindustan Petroleum Corp and Mangalore Refinery and Petrochemicals Ltd submitted tenders to secure crude.