Recently, petroleum major BP announced it plans to sell more U.S. crude to Asian countries. This is after its shale oil production escalates. It is also seeking to capitalize on the growth in the world’s key demand region.
In a news report interview, the strategy outlined with company executives comes after BP’s move to purchase giant miner BHP’s assets in the United States’ prolific Permian shale basin last year.
This move is anticipated to give the portfolio a lift in light-sweet crude production.
BP’s chief executive officer of supply and trading for the eastern hemisphere Sharon Weintraub said, “This (Asia) is a key growth region” for energy force.
Meanwhile, she didn’t identify BP’s growth targets for Asia sales.
In addition, Weintraub said, “We recently bought BHP’s assets in our U.S. business. This is to have a greater amount of Permian crude coming to market over the next few years in terms of our equity portfolio.”
Head of analytics at the supply and trading, eastern hemisphere business, Zoe Anderson, said, “The idea is, yes, we want to send U.S. crude supply here in Asia.”
BP has been dynamically shipping U.S. crude to Asian countries. It is also offering cargoes to Japan, Australia, Thailand, and Vietnam. It is because it hustles for business in the world’s fastest-growing market.
Other giant producers and traders such as Occidental, Trafigura, Royal Dutch Shell, Exxon Mobil Corp, Chevron, and Aramco Trading Co. are also making a business-like BP.
Updates on The Additional U.S. Crude Being Administered
Moreover, BP ships a range of light crudes to Asian countries, like West Texas Intermediate (WTI) Midland with Eagle Ford, and lastly the medium-sour grades Mars and Thunder Horse.
New additional U.S. crude is being processed by refineries beyond Asia.
It is switching the dropping regional low-sulfur crude production. This is together with some of the world’s top crude oil importers, like South Korea and India.
This year, they are also expanding imports to replenish sanctions-strikes on Iranian oil.
Sanctions on Venezuela, as well as Iran, have maintained crude supplies in Asia snug, backing Brent at $60 a barrel.
On the flip side, new supplies of refined products, liquefied natural gas (LNG) and petrochemicals have hit the market.
The incident that hit the market was the trade tensions between the United States and China. The conflict has damaged the demand as prices started weighing this year.
In a statement, Weintraub said, “With a lack of confidence affecting things like trade flows that are going to extend downside risks.”
She also said, “In the short run till we see some resolution, which is still unclear when that’s going to happen.”
Plans of New LNG Supplies After 10 Years
Meanwhile, BP is also anticipating new LNG supplies. These are from Indonesia, Africa, and the United States to come online in the early next decade, Weintraub stated.
This is a period where some analysts believe the market to tighten.
The upcoming supplies consist of BP’s share of production in the Greater Tortue development offshore Senegal with Mauritania, Venture Global’s Calcasieu Pass project in the United States.
Indonesia’s Tangguh phase 3 expansion is also included on the approaching suppliers.
Weintraub said, “LNG is a cyclical market, it happens to be on the weaker side today, and we do expect demand to potentially right-size itself.”
Last month, BP indicated it would construct a network of electric vehicle charging hubs in China with Didi Chuxing.
It is the country’s biggest ride-hailing company, which is in a bet on the world’s largest market for such cars.
Read more: Sanctions Drop Iran’s Crude Sales as Petroleum Products Export Boost
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