The US could receive its first Oman crude cargo in three years as the price of West Texas Intermediate (WTI) crude futures rose above Omani oil futures, Dubai Mercantile Exchange (DME), wrote Reuters. The prices for Middle East futures have gone down in the wake of the removal of the sanctions on Iran, as fear mounts that Iranian crude will further feed the global supply glut.
Oil-trading sources told Reuters that US refiner Koch may have contracted as much as 2m barrels of Omani crude to be shipped to the US Gulf Coast alone. The US is being swamped with crude imports since the US government repealed a decade-old law banning oil exports. In total the US is now importing 500,000b/d of crude from Asia and Europe. The figure was virtually zero in 2014-2015 in the aftermath of the shale oil boom. Analysts anticipate that as Iran resumes oil exports to Europe, even more Russian crude from Urals will make its way to the US.
Similarly, decreasing freight rates and declining US shale production – after the sector was hit by low oil prices – are contributing to this crude flow. Freight rates for Very Large Crude Carriers (VLCC), the tankers that carry Mideast crude to the US Gulf Coast, have fallen by 39% since mid-December, says Trade Arabia.