Asian refiners increasing purchases of U.S. crude oil

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　　Recently, some market analysts have said that major refineries in East Asia are expected to continue purchasing more U.S. light low-sulfur crude oil by 2026. This move is intended not only to broaden raw material supply channels, diversify geopolitical risks, and increase refining profits, but also to maintain diplomatic relations with the U.S. government. 　　Market experts say that most refineries in East Asia have long used sulfur-containing crude oil as their primary feedstock. However, heads of raw material and inventory management at state-owned and large private refineries in South Korea, Japan, and ** stated that increasing purchases of U.S. light low-sulfur crude oil helps enhance the security of energy supply and stabilize industrial and supply chains. Traders of sulfur-containing and low-sulfur crude oil at the trading offices in Singapore, located in various East Asian refineries, have also confirmed this trend. 　　Japan’s refining industry has always relied heavily on heavy, sulfur-containing crude oil, which accounts for over 90% of the country’s total crude oil imports. A senior market analyst at Japan’s Mitsui & Co. and a raw material manager at Japan’s largest refiner, Ineos, said that Japanese refineries have realized the need to improve their energy security and reduce geopolitical risks; as a result, they are increasingly viewing U.S. light low-sulfur crude oil as an ideal alternative source to create a more balanced and resilient crude oil supply portfolio. 　　Data from Japan’s Ministry of Economy, Trade and Industry show that as the fourth largest crude oil importer in Asia, in October 2025 Japan imported 106,300 barrels per day of West Texas Intermediate crude and West Texas Light crude from the United States. This figure represents a more than 26-fold increase compared to 4,029 barrels per day during the same period last year, and it is also nearly triple the 36,200 barrels per day imported in September 2025. 　　**South Korean refiners are also adopting the purchase of U.S. crude oil as a strategic measure to reduce their dependence on suppliers of heavy, sulfur-rich crude oil. A raw material manager at a large refinery in Ulsan, South Korea, said, “Using American light, low-sulfur crude oil not only helps to mitigate the risks associated with price fluctuations in imported heavy, sulfur-rich crude oil, but it also aligns with the company’s goal of diversifying its raw material sources and increasing overall refining profits.” ”Data from South Korean oil companies show that in 2025, South Korea is expected to remain the largest buyer of U.S. crude oil in Asia, with annual purchases amounting to 136 million barrels. **Customs data show that the country is the largest importer of U.S. crude oil in Southeast Asia; in the first 10 months of 2025, daily imports of U.S. West Texas Intermediate crude oil reached 148,500 barrels, representing a surge of 31% on a year-on-year basis. 　　Another major reason for choosing U.S. crude oil is its cost-effectiveness. As the price gap between Brent and Dubai crude futures narrows significantly, and the price of West Texas Intermediate crude in the United States is lower than that of mainstream heavy sulfur-containing crudes, refining profits and trade efficiency are increasingly tilting toward the procurement of light, low-sulfur crude from the United States. Refinery raw material managers in East Asia and traders in Singapore have both pointed out that despite the longer transportation distances for crude oil from the United States, its superior quality and higher yield of middle distillates give it a significant cost advantage. 　　According to Platts data, since the second half of 2025, the average price difference between Brent and Dubai crude oil futures has been only 0.72 dollars per barrel, compared to an average of 1.12 dollars per barrel in the first half of the year. This weakening of the price gap has made U.S., North Sea, and Mediterranean low-sulfur crude oils, which are linked to European benchmark oil prices, more economical compared to Middle Eastern crude oils linked to Dubai oil prices. 　　A raw material manager at a large refinery in Ulsan, South Korea, said, “The attractiveness of Midland crude oil from West Texas, USA, is continuing to increase.” ”According to S&P Global Commodity Insights’ analysis, since the fourth quarter of 2025, the average price difference between U.S. West Texas Intermediate crude and Muban crude delivered to Northeast Asia has been -0.46 dollars per barrel. Regarding the ratio of sulfur-containing to low-sulfur crude oil imports by 2026, an official from PTT’s investor relations department, which is a state-owned refinery, told Platts that currently heavy sulfur-containing crude oil accounts for 60% to 70% of the refinery’s raw material mix, but the inclusion of light low-sulfur crude oil from the United States has significantly increased the flexibility in raw material selection. 　　Furthermore, raw material managers in Japan and South Korea have stated that when the price gap between Asian diesel and jet fuel feedstocks is high, West Texas Intermediate crude from the United States is particularly favored, as this light, low-sulfur crude yields higher amounts of light and medium distillate oils. A senior trading analyst at Mitsui & Co. said, “The CIF price of West Texas Midland crude in the United States still has a discount advantage over some light sulfur-containing crudes from the Middle East.” ”　　It is reported that increasing U.S. crude oil imports brings both economic and diplomatic benefits. Countries such as Japan, South Korea, and ** are improving their bilateral relations with the United States by purchasing more of its light, low-sulfur crude oil. 　　A raw material procurement strategist at PTT said, “**We commit to increasing purchases of U.S. crude oil to deepen our partnership with the United States.**” ”On October 26, 2025, Thailand and the United States announced that they had reached an outline for a bilateral trade agreement, **under which they committed to increasing the purchase of U.S. energy products. On the South Korean side, the $100 billion energy procurement agreement it signed with the United States is a core component of the broader trade agreement between the two countries. The trade agreement aims to reduce bilateral tariffs from 25% to 15%. In Japan, on October 28, 2025, the United States and Japan signed a comprehensive trade and investment agreement to implement the commitments made earlier. These commitments include Japan’s pledge to invest $550 billion in areas such as energy infrastructure in the United States, liquefied natural gas, advanced fuels, grid upgrades, as well as the mining, processing, and refining of key minerals.