Exxon has scheduled its first-ever gasoline shipment from the U.S. Gulf Coast to Australia amid a global fuel export crunch because of the war in the Middle East.
The shipment is one of two scheduled for this month, Reuters reported, citing unnamed sources. The two shipments together will total 600,000 barrels, mostly of gasoline but also including other refined products. According to the report, the freight cost of the shipments would come in at $6 million, or $20 per barrel.
This is costlier than shipping fuel from Asia, the report noted, citing analysts as saying the exporting of refined oil products from the Gulf Coast to Australia are unlikely to become sustainable even with the current disruption of crude oil supplies to Asian refiners.
Exxon operates three fuel import terminals in Australia but has been sourcing the fuel from Asia. Right now, however, Asian refiners are grappling with the fallout from severe tanker traffic disruption in the Strait of Hormuz, with China already imposing curbs on fuel exports.
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“In Asia, Thailand, India, Korea and the Philippines are the most vulnerable to higher oil prices, due to their high import dependence, while Malaysia would be a relative beneficiary since it is an energy exporter,” Nomura analysts wrote in a note, cited by CNBC, earlier this week. However, it seems that fuel exporters in Asia beg to differ and are prioritizing domestic supply security over exports.
Meanwhile, Korean media reported that seven oil tankers operated by Korean refiners were stranded in the Persian Gulf because of the Hormuz traffic disruption. Other reports identify no fewer than 37 India-flagged vessels, including oil tankers and LNG carriers as also in the Strait or the Gulf of Oman, some of them loaded with the respective fuels and others waiting to load.
The situation in the Strait of Hormuz has pushed Brent crude close to $85 per barrel, with WTI at over $77.50 at the time of writing.
By Charles Kennedy for Oilprice.com
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