Asian refiners have escalated their acquisitions of Argentine crude due to the disruptions in supply from the Middle East caused by the Iran war, which has intensified competition for barrels from alternative regions. In recent weeks, processors in Japan, South Korea, and China have acquired Argentina’s Medanito oil, with at least one cargo reportedly loaded earlier this month, according to traders familiar with the situation. The grade is analogous to US West Texas Intermediate, which has experienced increased demand since the onset of the conflict. The volumes of Argentine oil flowing to Asia are minimal when compared to other producing countries; however, the interest highlights the initiatives by refiners to diversify their supply and enhance energy security.
According to government data, the country has averaged exports of 215,000 barrels per day this year, with the majority of these barrels directed toward the US and Chile. Japan’s Eneos Holdings Inc and Taiyo Oil Co have recently acquired Medanito oil, marking the first instance of the nation’s refiners engaging with this grade, according to traders. South Korea’s Hyundai Oilbank Co, alongside Chinese major PetroChina Co and Shaanxi Yanchang Petroleum, were included among other buyers, they noted. Cargoes have loading dates extending from August to October. A spokesperson for Hyundai stated that the company imported Argentine crude in August and will “consider additional imports after reviewing their economic viability and compatibility with our facilities.”
Taiyo refrained from providing any commentary. Eneos, PetroChina, and Yanchang did not provide an immediate response to emailed requests for comment. Medanito was evaluated at a discount of US$1 per barrel relative to benchmark ICE Brent prices by Argus Media on Friday. That represents the most minimal discount observed since mid-June. Exports to Asia reached an unprecedented average of 35,000 barrels per day this year, based on Argentine data available until July, significantly exceeding the average of 2025 by more than fivefold. The South American nation has increased drilling for Medanito from the Vaca Muerta shale formation as its energy sector experiences a resurgence under the leadership of President Javier Milei. The appeal of Medanito lies in its cost-effectiveness compared to similar-quality WTI, coupled with the advantage of not requiring transit through any chokepoints to reach Asia.
The grade is sold at a discount of approximately US$1 to US$2 per barrel in relation to US oil, according to traders. Oil is transported around the southern tip of South America before crossing the Pacific Ocean to Asia, avoiding the need to transit the Panama Canal or Suez Canal. Argentina’s ports face infrastructure constraints that limit their ability to accommodate very large crude carriers, as they can only load Aframax vessels for sea exports. The Vaca Muerta Oil Sur project, set to commence operations next year, is expected to mitigate these challenges and enhance shipment volumes further. The project encompasses a crude pipeline and a terminal capable of accommodating some of the largest tankers.
