Texas Promotes Pure Permian Crude Oil To Overseas Buyers

As the U.S. is growing its crude oil exports and more pipelines begin shipping Permian crude straight to export facilities in Texas, producers and traders of U.S. crude may finally have what overseas buyers want: pure unblended Midland WTI barrels.

Buyers, especially in Asia, want the so-called ‘neat’ barrels with consistent quality of the Midland grade—the purer, the better, traders and producers tell Reuters reporters Devika Krishna Kumar and Collin Eaton. The new pipelines out of the Permian to the Texas export facilities deliver Midland crude straight to the ships without much blending and without having to first pass north to Cushing, Oklahoma.

“What we’re hearing from our customers around the world is they want pure Midland WTI blend,” Ben Luckock, co-head of oil trading at one of the world’s top commodity traders, Trafigura, told Reuters.

Last month, Trafigura said that it had started shipments of crude oil from the Permian Basin to the Corpus Christi / Ingleside, Texas area via the newly operational Cactus II Pipeline system.

“Trafigura is at the forefront of connecting the American barrel to the global market,” Kevin Jebbitt, Head of Crude Trading for Trafigura, commented on the start of the shipments.

The new pipelines to Corpus Christi would allow for ‘neat’ Midland WTI crude barrels to be exported to buyers who have told American exporters and global traders that they want consistent quality with as little blending as possible, executives tell Reuters.

In comparison, the Houston export facilities, which are still the most active hub for U.S. crude oil exports, often offer blended crude oil because many of the pipelines ending up at Houston pass through Cushing, which also stores barrels from the U.S. oil fields in the north.

Now the new pipelines from the Permian basin to Corpus Christi would help U.S. oil producers and exporters to pitch their ‘neat’ Midland barrels to the market, especially in Asia.

Producers need to make sure their barrels are of consistently high quality and unblended, otherwise they could lose credibility with Asian buyers, Josh Baskett, Vice President, Oil & Gas Marketing at Continental Resources, told Reuters.  

By Tsvetana Paraskova for Oilprice.com

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