Thailand and Japan Continue to Increase Purchases of U.S. Crude Oil

From September 29 to October 2, raw material managers and crude oil procurement strategists from four major Thai and Japanese refiners—including Thailand's PTT and Japan's ENEOS—said that refiners in both countries will continue actively purchasing U.S. crude oil for the remainder of this year. Market participants said this move reflects not only the price competitiveness of low-sulfur U.S. crude and a desire to reduce reliance on Middle Eastern crude, but also aims to support their governments' trade negotiations with the United States.

Raw material managers at Thai refiners noted that due to sharply reduced profits caused by geopolitical tensions, Thailand is actively diversifying its crude oil sources to reduce dependence on Middle Eastern supplies. Japanese refiners’ managers and procurement strategists said that as conflicts between Iran and Israel escalate, Japan’s refining sector is also intensifying efforts to reduce overreliance on Middle Eastern crude.

In Thailand, state-owned energy giant PTT has established an "emergency task force" to monitor global economic conditions and optimize procurement strategies, including increasing purchases of U.S. crude. Japanese refiners’ managers revealed that since the beginning of this year, Japanese refineries have significantly increased their procurement of U.S. crude oil.

The latest data from Thailand’s customs authority shows that in August, Thailand imported 146,682 barrels per day (bpd) of crude from the U.S., up 44.7% year-on-year. From January to August, U.S. crude imports averaged 151,250 bpd, up 30.5% year-on-year, accounting for nearly 16% of Thailand’s total crude imports of 956,758 bpd during the same period. Data released by Japan’s Ministry of Economy, Trade and Industry (METI) on September 30 showed that Japan imported 68,918 bpd of U.S. crude in August, down 7.8% year-on-year but above the three-year average of 62,497 bpd. From January to August, Japan’s U.S. crude imports rose 42.9% year-on-year to 85,017 bpd.

On October 2, a raw material inventory manager at Japanese refiner ENEOS said: “Procuring large volumes of U.S. crude not only reflects our strategic shift toward the U.S. as a reliable 'non-Middle East' supply source, but also aligns with the broader goal of reducing exposure to geopolitical risks in unstable regions.”

Market participants said the price advantage of U.S. crude is driving procurement demand from Thailand and Japan. Between September 30 and October 2, traders in Singapore and raw material managers at Thai and Japanese refiners said the pricing advantage of U.S. crude would continue attracting purchases from refiners in both countries, aiming to optimize feedstock costs and reduce dependence on Middle Eastern crude. S&P Global Commodity Insights data showed that by the end of August, the price spread between Brent and Dubai crude turned negative. This shift means that low-sulfur crudes from the Americas, North Sea, and Southeast Asia have become more economically competitive compared to Dubai-linked Middle Eastern grades. The Brent-Dubai Exchange Futures Swap (EFS) spread is a key indicator measuring the premium or discount of Brent crude relative to the Middle Eastern benchmark. On August 27, the EFS fell to -$0.08 per barrel, the lowest level since March 21. Since the start of the third quarter, the EFS has averaged $0.76 per barrel, down from the second-quarter average of $1.43. S&P data also showed that on October 1, the price difference between U.S. WTI Midland crude and Murban crude was -$0.31 per barrel, far below the annual high reached in June.

In addition, U.S. crude is becoming a diplomatic tool supporting trade negotiations. On October 1, a PTT investor relations manager told S&P Global that PTT’s U.S. crude imports reached a record high of 7.3 million barrels in June. He said that significantly increasing U.S. crude imports helps Thailand secure a stronger strategic position in ongoing trade talks with the United States.

According to Thai media reports and refinery sources, after negotiations, Thailand successfully reduced U.S. reciprocal tariffs from 36% to 19%, effective since August 6. On October 1, a PTT procurement strategist said that as Thailand continues negotiating with the U.S. over "additional tariffs" and "Thailand’s market access for U.S. goods," committing to import U.S. crude could further strengthen its negotiation stance.

On October 2, both a raw material manager at a major Japanese refiner and a market analyst at a Japanese trading house in Singapore said that although the U.S. has agreed to impose a 15% import tariff on Japanese goods, Japan’s substantial increase in U.S. crude purchases this year could help the Japanese government gain greater leverage in future detailed trade negotiations.