EnergyWatch

Infected US shale oil is being turned away by Asian buyers

The complex web of US pipelines, tanks and export terminals that has helped make the US the world's top oil producer is causing a headache for some crude buyers.

Photo: Nabil al-Jurani/AP/Polfoto/Arkiv

As various types of crude pass through the supply chain from inland shale fields spanning Texas to North Dakota, they risk picking up impurities before reaching Asia – the world's biggest oil-consuming region. Specifically, refiners are worried about the presence of problematic metals as well as a class of chemical compounds known as oxygenates, which can affect the quality and type of fuel they produce.

Two refiners in South Korea – the top buyer of US seaborne supply – have rejected cargoes in recent months due to contamination that makes processing difficult. Growing North American output from dozens of fields pushes everything from highly-volatile oil to sticky residue through shared tributaries and trunk pipes. Smaller carriers then take cargoes from shallow-water ports to giant supertankers in the Gulf of Mexico for hauling to far-away buyers.

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