Divergent growth: COVID-19-hit Asia ships more gasoline to U.S.

Exports of gasoline and blend stocks from Asia to the United States rebounded in May from April, including two rare shipments from India, to meet rising summer demand in the west, industry sources and analysts told Reuters.

Global gasoline demand growth has shifted back to the United States and Europe, where widespread COVID-19 vaccinations are spurring more travel. In contrast, fuel use in Asia outside China has slowed recently as India, Malaysia and other key fuel markets were hit by lockdowns, prompting traders to send fuel westwards.

In May, traders loaded about 3.8 million barrels of gasoline and blending components from Asia, mainly South Korea and India, bound for the United States, about 51% more than in April, according to Reuters calculations based on data from oil analytics firm Vortexa.

Exports from South Korea to the United States doubled in May from April, while India’s volumes rose 17%, the data showed.

In what traders say are rare moves, at least two gasoline cargoes are being shipped west from India’s Reliance Industries..

Fuel tanker Asprouda chartered by Royal Dutch Shell loaded about 60,000 tonnes of gasoline from Sikka in western India on May 15, and is heading for New York, data from Refinitiv Eikon.

A second tanker Amfitriti hired by TotalEnergies SE loaded about 90,000 tonnes of gasoline from Sikka on May 19 and is bound for either Europe or the United States, a shipbroker said.

Sikka port in western Gujarat state is operated by Reliance, operator of the world’s biggest refining complex. Reliance’s gasoline and alkylate exports surged to a two-year high of more than 1.3 million tonnes for May, Refinitiv Oil Research said.

“Reliance and others on the west coast are raising gasoline output as Dubai margins are firming up and there is demand for the fuel in Europe,” the India-based trader said.

Firm gasoline demand has also pushed up Asia-bound prices of some light crude grades from Saudi Arabia and Russia.

India’s Mangalore Refinery and Petrochemicals Ltd will offer three gasoline cargoes in June compared with an average of one a month, a company source privy to the plan said.

Indian Oil Corp, the country’s top refiner, has boosted exports of gasoline from Paradip port and will sustain higher gasoline exports in June, a company official said.

“It’s a combination of both improved margins in the West and falling fuel demand here,” he said.

However, demand from Asian markets is expected to rebound.

Asian fuel demand dropped by about 130,000 barrels-per-day (bpd) in May from April and is expected to hover around 7.1-7.3 million bpd in June and July, slightly below 2019 levels, FGE analysts added.

But as vaccination rates climb, Asia’s gasoline demand is expected to rebound to 7.4 million bpd in the third quarter, FGE said, adding this could widen the region’s gasoline deficit to 120,000 to 300,000 bpd in the third quarter from about 60,000 bpd currently.

“On the back of Asian demand recovery and continued strength in U.S., Singapore gasoline cracks should be supported at the $8.0-9.0/bbl range through June-August,” FGE said.
Source: Reuters (Reporting by Nidhi Verma in New Delhi, Shu Zhang, Koustav Samanta, Roslan Khasawneh and Jessica Jaganathan in Singapore and Heekyong Yang in Seoul; Editing by Florence Tan and Kim Coghill)

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