Oil producers are taking the business to the Asian Market

Brent crude oil

Mars and Poseidon are moving to Asia, the two varieties of U.S. produced crude oil are leading American exporters’ upfront challenge to OPEC for market share in Asia.

In an overhaul to the fixed order, U.S. crude oil exporters are taking more cargoes toward the booming Asian market as they capitalize on commendatory price differentials and as supply curbs by the Organization of Petroleum Exporting Countries compel Gulf producers to pull back from their regular demand heartland.

A wave of good news for Asian buyers who benefit from a more miscellaneous selection of crude oil on offer and as business between suppliers pulls down prices.

On October 2, India received its first American oil cargo of 1.6 million barrels. This is the result of Prime Minister Narendra Modi’s visitation to the U.S. in June wherein he arranged to supply three Indian refineries with approximately 8 million barrels.

This was the result of the change when the Obama administration lifted the 40 year old ban on exporting domestic oil in December 2015.

If market economics continues to stay favorable, more U.S. crude will resume to make its way to the Asian market.

One of the significant factors dictating international oil flows is the price gap between two global benchmarks which are the Brent Crude Oil and the U.S. counterpart West Texas Intermediate. In most cases, the higher Brent’s premium is over WTI.

The price gap between WTI and Brent reached it widest level in two years in early October at more than $6.00 per barrel. Exporting is a progressively popular alternative. U.S. crude exports increased to a record 1.98 million barrels per day in the last week of September 29.

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