US crude exports to Asia nearly halve in July on higher WTI: Vortexa  

Quantum Commodity Intelligence – US crude exports to Asia are poised to slow in July after a buoyant first six months of the year, according to ship tracking and analytics firm Vortexa Tuesday, citing a slowdown in shipping fixtures.

Vortexa said preliminary fixtures indicate that close to 730,000 barrels per day of US crudes are expected to be loaded for Asia this month, nearly half the average of 1.3 million bpd in the first six months of the year.

Of the nine VLCC tankers booked, at least four are headed for South Korea and three to China.

"Buying interest of US light crude from Asian refiners has faded this month as arbitrage economics tighten on rising WTI prices," said Vortexa, referencing the higher US benchmark.

"In response, South Korean refiners integrated with large petrochemical complexes have stepped up their condensate purchases last month to maintain naphtha feedstocks for their reformers and crackers."

Vortexa said condensate loadings to South Korea rose to a 9-month high of 310,000 bpd in June, a trend that could continue this month if condensates remain more competitively priced than light crudes.

Shipping

Meanwhile, Vortexa noted that global crude heading to India dropped for the fourth consecutive month in June at 3.2 million barrels as the country emerges from the second wave of Covid-19 that struck in the second quarter.

"Our analysis predicts that US light crudes will mostly remain in the US and Europe as long as the summer gasoline strength continues. Asia, will remain as the marginal importer, with any surplus barrels priced at a discount to compete with similar light crude grades from the Middle East," said the report.

This means that Aframax and Suezmax tankers will likely receive a demand boost from higher transatlantic flows, while VLCC tanker demand falls on lower exports to Asia.