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Oil Refiners in the United States Choose Iraqi and Canadian Crude to Replace Storm Losses Traders

Oil Refiners in the United States looking to replace petroleum lost after a storm slammed the Gulf of Mexico last month have turned to Iraqi and Canadian crude, while Asian customers have sought Middle Eastern and Russian grades, according to experts and dealers.

Royal Dutch Shell, the largest producer in the US Gulf of Mexico, warned this week that Hurricane Ida damage to an offshore transfer capacity might confine Mars sour crude supply until early next year. The grade is extensively employed by US Gulf Refiners as well as businesses in South Korea and China, Mars’ main two export destinations.The United States exports about 3 million barrels of oil per day (BPD), with the Gulf Coast accounting for the lion’s share of this amount.

Oil Refiners in the United States Choose Iraqi and Canadian Crude to Replace Storm Losses TradersWith global gasoline consumption returning to pre-pandemic levels, Refiners will be forced to compensate for the Mars shutdowns.During prior gaps, Basra crude was prominent. When US sanctions against Venezuela cut off heavy crude grades from Gulf refineries in 2019, Iraq swiftly expanded supplies. Heavy-oil producers in Canada benefited as well.Exxon Mobil and Placid Refining Company have received oil from the United States SPR (Strategic Petroleum Reserve), fulfilling immediate sour crude demands.

Sour crude from the SPR was particularly sought by Refiners wanting to replace Mars barrels. Many others are purchasing further cargoes of Basra for October delivery, at prices that are fairly appealing given the general weakness of sour crudes”, according to a United States-based Gulf crude broker.

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