Japan to Import US Crude in May

Posted by Joseph Keefe March 16, 2016

Phillips 66 actively offering U.S. crude in Asia.

Japan will receive a U.S. crude cargo in May, its second such purchase from the United States since Washington lifted a four-decade ban on crude exports, industry sources said on Wednesday.

This will follow the arrival in April of Japan's first crude cargo from the United States, bought by Cosmo Oil Co earlier this year, indicating a growing willingness among Asian refiners to experiment with new grades as they seek to diversify their feedstock sources away from the Middle East.

The May shipment will be from Phillips 66, said the sources, who did not want to be named as they were not authorised to speak to media. Phillips 66 has sold a Panamax-sized cargo likely to Japan's TonenGeneral, they added.

The U.S. firm could not be reached for a comment, while a spokesman for the Japanese refiner declined to comment.

Japan usually gets more than 80 percent of its crude from the Middle East. But Cosmo and TonenGeneral, which have bought U.S. condensate previously, are among the more adventurous Asian buyers who are willing to experiment with new grades.

Chinese refiner Sinopec Corp has also bought U.S. crude, to be loaded from a Gulf Coast port in March.

ACTIVE SELLER

To meet this rising demand, Phillips 66 has been actively marketing U.S. crude to Asian buyers since Washington lifted the export ban, joining a string of trading houses who are taking advantage of the relatively new arbitrage.

However, the U.S. crude's economics or whether it is more competitively priced than oil from the Middle East can only be determined after it is processed at refineries, one source said.

Phillips 66 has likely shipped out its first U.S. crude cargo, which is set to arrive into Singapore next month, shipping data on Thomson Reuters Eikon showed.

Phillips 66 has also been planning to co-load U.S. crude with Colombian grade Castilla for Asia, although it is unclear if it has found any buyers for such a cargo, a Singapore-based trader said.

In addition to U.S. crude, Phillips 66 has been marketing Black Hawk condensate and it also regularly sells heavy naphtha from the United States to Asia, traders said.