HOUSTON: US imports of crude oil from Saudi Arabia in August and September are poised to reach the highest two-month level since early 2017, as refiners take advantage of relatively cheaper prices, Thomson Reuters trade flow data show.
Discounts for Saudi Arabia and other OPEC producers have encouraged flows, with OPEC's daily basket on Thursday more than $2 per barrel cheaper than Brent. US demand for crude also is rising on strong refining margins and high utilization rates.
"Middle East producers are becoming much more aggressive, wanting to bring their barrels back into the market," Marathon Petroleum Chief Executive Gary Heminger said at a Barclays energy conference this week.
The influx of Saudi crude has been driven in part by the Trump administration's efforts to bring back oil-export sanctions on Iran, shifting global flows. Iraqi crude exports to the United States fell to 195,000 bpd last month, the lowest level this year, as it sent more oil to India. India cut its purchases of Iranian crude by more than half, to 339,000 bpd in August, data from market intelligence firm Kpler show.
Marathon Petroleum, the second-largest US refiner by processing capacity, is hearing from suppliers of Middle East crude "we want to come back and sell more crude into your marketplace," Heminger said. Marathon declined to elaborate further.
Saudi September crude deliveries to the United States will reach 940,700 bpd on top of the 1.03 million bpd that arrived last month, according to Thomson Reuters trade flows data.
That makes US imports of Saudi crude in August and September the highest since February and March 2017. US imports of Saudi crude had fallen as low as 521,000 bpd last November amid OPEC efforts to cut global inventories, the data show.
Twenty-three oil tankers carrying Saudi crude are scheduled to arrive in the United States from Thursday to mid-October, carrying a combined 41.5 million barrels. The majority of the crude is destined for US Gulf Coast and West Coast ports. West Coast imports of Saudi crude reached the highest level since 2013 in August.
A continued influx of Saudi crude could boost US crude inventories and weigh on prices, said one trader.
"If the Saudis are sending barrels here when we're about to get into a refinery turnaround season, that will stuff everything up for a while," the trader said, referring to oil in storage.
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