Oil major BP (NYSE:BP) is set to ship 1 million barrels of U.S. crude to Australia and Thailand by the end of this year in what would be the first U.S. crude imports for the two Asian-Pacific countries, Reuters reported on Wednesday, quoting three trade sources.
BP has sold 300,000 barrels of U.S. crude to Thai company PTT PCL and will ship the other 700,000 barrels to its own refinery in Australia, the Reuters sources said, adding that the London-based oil giant will load the crude from the U.S. Gulf Coast on a tanker expected to dock in Asia in December.
According to BP’s refining in Australia page, the company’s refinery currently processes crude oil shipped from the Middle East, West Africa, New Zealand, Indonesia and north-west Australia.
BP’s shipment to Thailand and Australia would be the company’s at least fifth cargo of U.S crude bound for Asia Pacific in 2016, after the U.S. repealed a four-decade-old ban on crude exports in December of last year.
BP seeks to raise U.S. crude exports to meet the healthy Asia Pacific demand. Traders also want to send more U.S. oil to Asia, but so far, the lower shale production and the very tight spread between the WTI and Brent prices for most of the year have not allowed them to take advantage of a profitable arbitrage window.
At the time of writing, WTI Crude traded down 1.46 percent to US$49.23, while Brent Crude was down 1.5 percent at US$50.03.
BP may start processing U.S. crude at its Australian refinery, but it has backed out of some of its upstream plans in Australia. BP has quit a US$600-million drilling operation in the Great Australian Bight. The project was not in line with BP’s “strategic goals,” the company said. Another reason for the withdrawal could be the strong public opposition to drilling for oil in the pristine Bight, and several regulatory delays, including two rejections from Australia’s National Offshore Petroleum Safety and Environmental Management Authority.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
Tsvetana is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing for news outlets such as iNVEZZ and…