Reuters reported Middle Eastern crude prices in Asia dropped to their lowest point inmonths as Asian refiners held off on spot purchases and China and India gorged on cheap Russian oil. In accordance with traders, Saudi Arabia, the world's largest exporter, may lower rates for its term cargoes to Asia for a second consecutive month in July as a result of the price decline. On Wednesday, the benchmark Dubai crude premium dropped to a 4-month low of 70 cents per barrel over Dubai quotes, and Qatar set the price of al-Shaheen for the July term at a 27-month low after increasing supplies. China and India, the world's No. 1 and No. 3 crude importers, respectively, are purchasing record amounts of Russian crude at the highest prices since the December embargo, in contrast to Europe and the United States where sour crude prices have weakened due to the boycott of Russia's oil and the strong demand for alternative supplies. Some Asian refiners reduced output in April 2023 as a result of low refining profits, according to traders. Russian crude arrivals in China in May are predicted by shiptracking data from Kpler to be approximately 44 million barrels, the second-highest level ever. According to Vortexa statistics, China's commercial crude inventory increased to 950 million barrels this week from less than 900 million barrels two months prior, indicating that its refiners are not in a rush to purchase additional oil. In June and July, Taiwan's Formosa Petrochemical (6505.TW) intends to reduce the amount of oil processed at its 450,000 bpd Mailiao refinery. Following the closure of a 129,000 bpd unit last week by another Japanese refiner, Eneos (5020.T), Cosmo Oil (5021.T) of Japan shut down a 102,000 bpd crude processing facility on Wednesday. Since lighter grades produce products of greater quality, their prices are often higher than those of heavier grades. Additionally, American crude is becoming more expensive than Middle Eastern oil for Asian consumers, thereby narrowing the opportunity for arbitrage for American oil supplies to Asia. References: Xu, Muyu. 2023. Reuters: Sour crude prices weaken in Asia despite OPEC+ cuts.  Retrieved from https://www.reuters.com/markets/commodities/sour-crude-prices-weaken-asia-despite-opec-cuts-2023-05-19/ Image by atlascompany via https://www.freepik.com/