Oil cargo buyers from Asia are seen procuring distressed cargoes from the Middle East and African region, showing that the demand is coming back gradually. The region, known as the world’s biggest oil crude importers, were taken aback as the global Coronavirus pandemic damaging the economic condition since the end of January. Countries like China, India and South Korea have witnessed the acquisition of the so-called distressed shipments, a crude oil shipment that set to load in around a month or less. Some of the oil even already located at sea near Singapore, while others were purchased in days time before the loading schedule in June.
The most vigorous buyer are notably Indian Oil Corp, the country’s biggest refiner, with cargoes acquisitions from Africa, Middle East and U.S origins to produce fuel in order to meet the domestic consumption. Other Asian buyers also procure the cargoes in reason to compensate the OPEC+ allocation cuts by producers such as Saudi Arabia and Iraq, market sources said. IOC recently has seen bought the TEN Blend, Agbami, Brass Island and Bonga grade, also WTI Midland, Murban and Upper Zakum grades in the earlier purchases. South Korea refiners also purchased crude oil from the United Arab Emirates and China processors.
Many buyers in the region are in need of prompt delivery as lockdown restrictions started to ease and the industry back in productions. The movement is known to help the massive inventory of unsold crude build-up earlier this year, even providing support to oil prices downtrend since the end of April.
On the other hand, hoarding crude oil is less appalling than a few weeks ago, as Brent’s six-month time spread was at a forwardation of almost $13/barrel since last March, and prompt cargoes were much cheaper than later date cargoes.
