Alaskan Oil Shipments to South Korea Show Growing U.S. Reach
(Bloomberg) -- Alaskan oil shipments to South Korea are picking up, in another sign of the growing U.S. influence on the global market.
Two tankers, each able to hold a million barrels of oil, are delivering cargoes this month into Yeosu in South Korea after filling up at the Valdez terminal, the loading point for crude from Alaska’s North Slope fields. These shipments will raise the Asian nation’s intake of supply from the U.S. state to 2.75 million barrels so far this year, the most in government data going back to 1992.
The shipments may be destined for GS Caltex Corp, which operates the 790,000 barrel-a-day Yeosu refinery. GS Caltex officials didn’t immediately respond to email seeking comment outside of normal business hours.
U.S. crude exports have soared after a four-decade ban on most shipments abroad was lifted at the end of 2015. During the ban, most Alaskan oil was processed in domestic refineries. South Korea has increased its imports, and was the second-biggest destination for American crude in May. The country’s biggest refiner, SK Trading International Co., is looking to buy more varieties of U.S. crude.
Alaskan North Slope is a type of light, sulfurous crude, global supplies of which have tightened after U.S. sanctions on Venezuela and Iran and output cuts by the OPEC and its allies. Supplies were further reduced by contamination of Russian Urals crude.
“There’s been a lack of Iranian crude exports that would otherwise have be taken by Asian refiners” because of sanctions, said Andy Lipow, president of Lipow Oil Associates LLC in Houston.
The Polar Adventure is now waiting to discharge at Yeosu after loading its cargo at Valdez around July 6, according to ship tracking data compiled by Bloomberg. The week before, another tanker, the Alaskan Explorer, loaded at the same terminal and discharged its cargo in South Korea around July 14.
ANS crude has become more competitive because Dubai, the benchmark for Middle Eastern crudes, has gained relative to global marker Brent, Lipow said. Dubai’s discount to Brent narrowed by almost half since late May. ANS was $7.75 a barrel above U.S. futures Wednesday, after sinking to a $6.25 premium in early July.
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