Japan's Cosmo Oil buys US crude cargo

TOKYO: Japan's Cosmo Oil Co has purchased a US crude oil cargo, the first by a buyer in the region since the ending of a four-decade ban on most US crude exports and potentially the first in Asia, two sources familiar with the matter said on Tuesday.

Cosmo Oil, a unit of Cosmo Energy Holdings, has bought about 300,000 barrels of US crude, to be shipped from the United States in mid to late February, one of the sources said.

While exports of US crude have already set sail to Europe, the deal could mark the first shipment to Asia. Chinese oil refiner Sinopec Corp has also bought US crude for export, to be loaded from a Gulf Coast port in March.

Traders in Asia were also running the numbers on importing Alaska North Slope crude after the export ban was lifted.

Japan, which relies on the Middle East for around 80% of its crude imports, has been trying to diversify its energy sources.

The cargo is currently slated to arrive at Cosmo's 220,000 barrels-per-day (bpd) Chiba refinery and 132,000 bpd Yokkaichi refinery around the middle of April, one of the sources added.

Industry sources said the arbitrage window for importing US crude is closed with West Texas Intermediate prices higher than Brent. But Cosmo will make the transaction competitive by co-loading US condensate from the Eagle Ford shale in Texas in the same vessel, the source added.

Cosmo bought about 300,000 barrels each of US condensate and US light crude to be loaded on a Suezmax vessel, a second source said.

The company "regards it as a replacement of Middle East crude such as Murban or Das," he said.

Cosmo is aggressive in trying new oil that becomes available and was the first Japanese company to buy US condensate from booming shale production in 2014. - Reuters