U.S. Oil Lures Fastest Growing Guzzler as Arbitrage Opens Up

July 10, 2017

A type of U.S. crude pumped in the Gulf of Mexico is proving to be more attractive in the fastest-growing oil market compared with Middle East staples that are on offer.

Indian Oil Corp., the nation's largest refiner, has bought Mars Blend crude for arrival in October to the South Asian nation, according to Arun Kumar Sharma, the company's finance director. That's the processor's first purchase of American supply. About 1.6 million barrels of the grade will be loaded with 400,000 barrels of West Canadian Select on a very large crude carrier, he said.

The shipment is set for Asia as arbitrage flows of Mars crude to the world's biggest oil market become viable versus Middle East oil, supplies of which have been reduced by OPEC's output curbs aimed at easing a glut. The cuts have turned regional benchmark Dubai crude costlier relative to other markers such as Brent and U.S. West Texas Intermediate, luring rival supplies to India as well as other big consumer nations.

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