Exxon Sends American Gasoline to Australia

Exxon Sends First-Ever U.S. Gulf Coast Gasoline Shipment to Australia

For the first time, Exxon is preparing to export gasoline from the U.S. Gulf Coast to Australia, a move prompted by a tightening global fuel market due to ongoing conflict in the Middle East.

According to a Reuters report citing unnamed sources, two shipments are set for this month, carrying a combined total of 600,000 barrels. While gasoline makes up the majority of the cargo, other refined fuels are also included. The cost to transport these shipments is estimated at $6 million, or about $20 per barrel.

Analysts note that this route is more expensive than importing fuel from Asia. Even with current disruptions in crude supply to Asian refineries, experts believe that regular exports of refined products from the Gulf Coast to Australia are unlikely to be economically viable.

Exxon currently operates three fuel import terminals in Australia, typically sourcing supplies from Asian markets. However, Asian refiners are now facing major challenges due to severe shipping delays in the Strait of Hormuz, and China has already imposed restrictions on its fuel exports.

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Nomura analysts recently highlighted that countries such as Thailand, India, South Korea, and the Philippines are especially exposed to rising oil prices because of their heavy reliance on imports. Malaysia, on the other hand, stands to benefit as an energy exporter. Despite these pressures, Asian fuel exporters are prioritizing domestic needs over international sales, according to a CNBC-cited note.

Meanwhile, reports indicate that at least 37 Indian-flagged vessels, including oil and LNG tankers, are either waiting to load or are stuck in the Strait of Hormuz or the Gulf of Oman.

The turmoil in the Strait of Hormuz has pushed Brent crude prices close to $85 per barrel, while WTI has climbed above $77.50 at the time of this report.

By Charles Kennedy for Oilprice.com

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