Middle East Crude

　A sense of oversupply for Middle Eastern crudes grew rapidly as state-owned Saudi Aramco, Iraqi State Oil Marketing Organization (SOMO), state-run QatarEnergy and Kuwait Petroleum Corp started to sell crude grades inside the Persian Gulf one after another, following Abu Dhabi National Oil Co (ADNOC). Most end-users in Asia such as refiners in India and Japan had made supply plans and finished most of their procurements by early July after buying cargoes for August-loading and some for September arrival. As a result, in the current market, some cargoes for prompt-loading were seen as a surplus when they purchased additional cargoes inside the Persian Gulf.

African/European/Russian/American Crude

　In the US crude oil trade, offers for WTI Midland for October arrival in Northeast Asia were heard at a premium of $15.00 to Dubai quotes. Nevertheless, Japanese and South Korean refiners, seeing this level as overvalued, showed no interest in purchasing. Comparing WTI Midland and Murban prices on a Northeast Asia-arrival basis, WTI Midland was more than $10.00 higher than Murban, and arbitrage was closed. Consequently, Japanese and South Korean players were expected to reduce their purchases of October-arrival US crude and turn to Middle Eastern light grades such as Murban. "Amid deteriorating situation in Iran and reduced supplies of Middle Eastern crude, Japanese refiners since March had significantly expanded their purchases of US grades including WTI Midland and Mars. However, as Middle Eastern crude supplies are recovering, they are highly likely to shift their procurement to relatively cheaper Middle Eastern crude," a Singapore-based trader pointed out.

Asia Pacific Crude

　The supply schedule for September-loading Australian Ichthys condensate was settled. Two cargoes would be supplied for September loading, in line with typical monthly volumes. INPEX would handle one cargo for the first half of September loading, while TotalEnergies would handle one cargo for the second half of September loading. INPEX appeared to have started direct negotiations with end-users to sell its cargo. TotalEnergies, meanwhile, was expected to issue a sell tender for its Ichthys condensate next week. At INPEX's Ichthys LNG project (annual capacity of 8.9 million tons), strikes by workers ended in mid-June, and normal production activities have resumed.