Reports of Asian buying of African and Brazilian oil remain unconfirmed as shipping costs shift
Key Facts
It could not be verified that Asian refiners increased purchases of African and Brazilian oil on November 11, or that a decline in freight rates made those supplies more attractive. The circulating claim linked changes in transport costs to broader demand for Atlantic Basin crude, but the available facts do not confirm those developments in the session cited in the report. In September, independent Chinese refiners bought cargoes from West Africa, Canada and South America, according to trader estimates cited by Reuters. Those purchases exceeded 20 million barrels, according to estimates from two traders. That volume dates to September and does not confirm purchases on November 11. The report of a shift in Asian purchases on that day therefore remains unverified in the available information.
Market background indicates that transport costs had risen sharply in the preceding weeks. Spot tanker rates hit record levels in early October, as Middle Eastern producers increased exports during September. Reuters said those exports were moved through shuttle services and ship-to-ship transfers. A Vitol official said about 80 very large crude carriers were occupied transporting crude through the Strait of Hormuz. That contributed to tight vessel availability and higher shipping costs to Asia, according to Reuters' background reporting. In October, the head of Formosa Petrochemical said high freight rates had made shipping crude from Africa and the United States to Asia commercially unviable in practice, saying: "Freight is very expensive, so it is not really possible to ship crude from Africa and the United States to Asia."
The International Energy Agency described the impact of those rates on refining profitability as most severe in Asia, where refineries rely heavily on Middle Eastern crude. According to the agency, Gulf producers' exports rose by 4.4 million barrels per day in September to 13.9 million. Exports thereby exceeded 75% of pre-war levels, according to the October Oil Market Report. These figures provide context on Gulf supplies during September, but do not confirm a change in Asian refiners' purchases on November 11. On November 6, a Valero official said the cost of shipping crude from the U.S. Gulf Coast to Asia had reached $30–35 per barrel. The cost was about $5 per barrel a year earlier, according to the official, whose remarks were cited by Reuters.
The International Energy Agency is due to publish its next monthly report on November 13. The report includes historical data and forecasts for supply and demand for the coming year, according to the agency's release page. That is the next date specified in the available information for tracking the agency's oil market data.