Exxon to Send its First Fuel Shipment from to Australia
Exxon Mobil is planning to transport a minimum of 300,000 barrels of gasoline from the US Gulf Coast to meet its own import needs in Australia, according to reports. These upcoming shipments mark the first time the oil giant will be engaging in such transactions.
The decision to use this particular shipping route for refined products illustrates the significant impact the global oil trade has experienced due to the cessation of shipping in the Strait of Hormuz.
This disruption was triggered by Iran's targeting of vessels in the waterway in retaliation for attacks by the US and Israel.
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Exxon has secured the services of the medium-range vessels Largo Eagle and Nord Ventura to transport either gasoline, diesel, or jet fuel. The vessels will be loaded from Houston between March 13 and 16, as well as between March 15 and 18, according to reports.
According to reports, the vessels Largo Eagle and Nord Ventura have been chartered by the commodities trading company Vitol, who has subsequently leased them to Exxon for the purpose of making deliveries to Australia.
Asian refiners have been facing challenges due to a deficiency in crude supplies caused by disruptions in the Strait of Hormuz. This has led to a necessity for refineries reliant on Middle Eastern crude oil to reduce their operations and fuel output.
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ExxonMobil manages three fuel terminals in Australia that import refined products from various Asian countries and other regions for distribution in the domestic market. Additionally, the company's subsidiary, Mobil Oil, serves as a supplier of fuel to retailers in Australia.
The estimated total charter costs for a medium-range vessel with a capacity of 300,000 barrels of refined products on this route amount to approximately $6 million or $20 per barrel.
According to data from Kpler's ship tracking service, these shipments represent the initial shipments of fuel from the US Gulf Coast to Australia since Marathon Petroleum's Garyville facility in Texas exported gasoline to Australia in December 2023.
Traders and shippers expressed doubts regarding the long-term sustainability of such shipments, despite the urgent demand for fuel supply replenishment in Asia, due to the exorbitant freight expenses and scarcity of available vessels.
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According to James Noel-Beswick, a commodity analyst at Sparta Commodities, the arbitrage opportunity for transporting fuel from the US to Asia will be significantly influenced by the scale and duration of the conflict in the Middle East. The speaker noted that the recovery of trade flows to pre-crisis levels may be prolonged due to the reduction in activity by Asian refiners and the damage sustained by port infrastructure in the Middle East.