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Oil & Energy
Japan PM Calls for Resumption of Hormuz Traffic in Phone Call With Iranian President
Prime Minister of Japan Sanae Takaichi spoke with Iranian President Masoud Pezeshkian on Monday, calling for the smooth passage of maritime traffic through the Strait of Hormuz, according to a statement from her office.Takaichi restated Japan's position that conflict de-escalation through dialogue should be the sides' main priority and said she hoped Iran would take this opportunity.The prime minister urged Iran to allow free and safe passage through the closed Strait of Hormuz as soon as possible, for Japan and other countries around Asia, who are bearing the brunt of the waterway's closure, given their reliance on Middle Eastern crude imports.Iran's president updated Takaichi on the status of exchanges between his country and the US and offered an outlook of what lies ahead, the statement said, without offering further detail.The statement ended noting that the two leaders agreed on staying in close contact to foster an imminent resolution to the conflict.
Oil & Energy
Venezuela's May Oil Exports Reportedly Rise As Iran War Generates Demand
Venezuela's oil market revival sustained momentum through May, with crude and refined product exports rising slightly to 1.25 million barrels per day, Reuters reported Monday citing shipping data.Shipped volumes were 0.7% higher than April and recorded a 61% surge compared to the same period last year, totaling 67 export cargoes, the article said.The US consolidated its position as the top destination for Venezuelan crude, absorbing roughly 558,000 bpd.India followed as the second largest buyer at 427,000 bpd, while European refiners took in 169,000 bpd, the report said.Notably, all three of these destinations increased their offtake month-over-month.Venezuela imported 93,000 bpd of heavy naphtha to use as a crucial diluent, to support its rapid ramp-up of extra-heavy oil processing from the Orinoco Belt, the article said.
Oil & Energy
US Oil Exports Hit Record Amid Hormuz-Related Crude Scarcity
US exports of crude oil reached 5.6 million barrels in May, a record level as importers scour new origins to replace supplies inaccessible due to the closure of the Strait of Hormuz, a Reuters analysis of ship tracking data showed on Monday.Exports were an increase compared with April's 5.2 million barrels exported, according to Kpler, with US West Texas Intermediate prices trading at a wide discount to global benchmark Brent futures contracts.US crude grades are usually expressed as differentials to the WTI price, and their large discount versus Brent makes them more economical for foreign buyers to import US crude, even factoring in sometimes longer shipping routes.The discount for WTI reached as much as $20.69 per barrel versus Brent in March, just as the Iran war began, the widest in 13 years, the article said.Most of the deals for US crude exports in May were transacted in April, with the discount averaging about $8.86, deeper than the $4.85 average discount prior to the war.Asia accounted for almost half of the May US exports at 2.45 million barrels per day, the article said, while Europe was not far behind, taking 2.4 mmbbl/d.Japan alone bought 808,000 b/d, rising 32% on the month before, a record for the country and reflecting the fact that it usually relies on the Middle East for its oil imports.There were also record shipments to Mediterranean countries and the Black Sea area in May, with Bulgaria, Croatia, Turkey and Greece making an unusual appearance in the transatlantic market.Italy imported 335,000 barrels per day, pushing up the European import figure.Vortexa Senior Oil Market Analyst Rohit Rathod said while Asian buying was to meet near-term need, European buying was largely down to lower transatlantic freight rates, the article said.About 283,000 b/d or 5% of US crude exports to Europe and Asia in May were from US strategic petroleum reserves. About 172 million barrels are now being released from the reserves to combat rising prices.Exports are likely to soften in June as guarded optimism about a US-Iran peace deal reduce the sense of panic, narrowing the WTI discount to Brent as the latter retreats in price.Consultancy Energy Aspects sees average US exports in June of 4.9 mmbbl/d and 4.6 mmbbl/d for July, the article said.Chartering analyst at Signal Maritime, Georgios Sakellariou told Reuters he expected a drop of about 1 mmbbl/d in June versus May, with 10 fewer Very Large Crude Carriers observed for June.At the same time, low WTI crude inventories in the US will create an incentive to put more into domestic storage, several sources for the article said.WTI Midland crude shipping from East Houston and Mars sour crude both fell in price for July trade, on weaker demand.MEH traded at a $1.15 premium over WTI last Friday, while premiums had climbed to as much as $7.75 in April, for May shipment.The fall in Mars was more dramatic, slipping to a premium of $1.50 by Friday versus $17.50 in April.