Asian oil buyers hunting for more Saudi Crude on crisis fears

Asian oil buyers are trying to secure more crude from Saudi Arabia to be shipped in the next few months as the Russian invasion of Ukraine threatens to disrupt global flows and even create an energy crisis.

Customers in the world’s biggest crude-importing region are putting in inquiries to Saudi Aramco for shipments arriving in May, according to traders with knowledge of the matter who asked not to be identified as the information is private. That’s on top of a likely increase in requests for April-loading barrels, with nominations for those cargoes due in the next couple of weeks.

While oil exports from Russia are yet to be sanctioned, Western nations have cut some of the country’s banks from the SWIFT payment system that’s used for trillions of dollars worth of trade transactions around the world. Energy importers are nervous that companies trading Russian oil may run into trouble with payments, while transport may also become more difficult as more shippers become wary of carrying the crude.

At least four Asian customers are looking to boost purchases from the Middle East for May-loading cargoes, either via their term contracts or in next month’s spot market, according to traders. Abu Dhabi’s Murban and Saudi Arabia’s Arab Extra Light, as well as Iraq’s Basrah Medium and Arab Light, are among grades that may be sought after as replacements for Russian crude, they said.

The Asian physical market is expected to see a tightening of flows of arbitrage crude from the U.S., North Sea and West Africa as European buyers snap up those barrels in the absence of Russian varieties like Urals and CPC Blend, the traders said. That’s also spurring Asian buyers to seek more cargoes from the Persian Gulf, they said.