Australia Grabs Gasoline From 14,500 Miles Away in Rare Trade
(Bloomberg) -- Australia is pulling gasoline from 14,500 miles away in Europe, with companies including Trafigura Group Ltd. among those sending cargoes on what is a rare trade.
The world’s third-largest trader hired two tankers to deliver European gasoline to Australia, ship-tracking and lists of charters compiled by Bloomberg show. Another was booked by Caltex Australia Petroleum Pty. The first should arrive on Monday, having left Amsterdam on Jan. 11. The country last got gasoline from Europe in 2012, Australian government data show.
Australia would normally top up on the gasoline it produces domestically with cargoes from exporters including India, South Korea and Singapore that are thousands of miles closer. The unusual, long-distance trades could reflect a temporary gap between regional prices late last year, as well as improving fuel standards in Asia that made it harder for Australian buyers to get the kind of fuel the country needs.
“It seems to be a one off opportunistic trade, taking advantage of an open arbitrage” that was prompted by seasonally lower U.S. demand during winter and cheaper freight rates, said Rachel Yew, a senior analyst at FGE in Singapore. It’s also possible that it was harder than normal for Australia to procure the standard of fuel it needed from Asia at the time, she said.
The vessels booked by Trafigura are the Front Tiger and the Seaways Shenandoah, according to charter lists compiled by Bloomberg. The latter vessel is still in Europe. Caltex unit Ampol hired the Maersk Penguin. Both companies declined to comment. Tanker tracking shows all three are signaling for Botany Bay in Sydney where there’s a fuel-storage terminal. Together, the three vessels could deliver about 250,000 metric tons of cargo.
A voyage to Botany Bay from Europe is about 12,500 nautical miles, or 14,500 regular miles. A delivery from South Korea is less than half that.
“This is not a regular or common move as Asia is overall long gasoline, but occasional deficits in some months may prompt rare arbitrage movements,” said Tushar Tarun Bansal, a consultant from McKinsey Energy Insights. “Asian gasoline premiums over Europe specs widened significantly last December. This, coupled with weak freight rates and a contango structure, facilitated an arbitrage move.”
With assistance from Sherry Su, Javier Blas, Perry Williams, Andy Hoffman and Rob Verdonck. To contact the reporters on this story: Serene Cheong in Singapore at email@example.com; Firat Kayakiran in London at firstname.lastname@example.org; Ann Koh in Singapore at email@example.com. To contact the editors responsible for this story: Alaric Nightingale at firstname.lastname@example.org John Deane.
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