Asia refiners scoop up Argentine oil as Iran war hits supply

Asian refiners have increased purchases of Argentine crude as the Iran war disrupts supply from the Middle East and drives competition for barrels from other regions.

Processors in Japan, South Korea and China bought Argentina’s Medanito oil in recent weeks, with at least one cargo loaded earlier this month, said traders familiar with the matter, asking not to be named as they’re not authorised to speak to the media. The grade is comparable to US West Texas Intermediate, which has seen higher demand since the war began.

The volumes of Argentine oil flowing to Asia are tiny in comparison with other producing countries but the interest underscores efforts by refiners to diversify supply and bolster energy security. Exports from the country have averaged 215,000 barrels a day this year, according to government data, with most of the barrels going to the US and Chile.

Japan’s Eneos Holdings Inc and Taiyo Oil Co recently purchased Medanito oil, the first time the nation’s refiners have taken the grade, traders said. South Korea’s Hyundai Oilbank Co, along with Chinese major PetroChina Co and Shaanxi Yanchang Petroleum, were among other buyers, they added. Cargoes have loading dates stretching over August to October.

A spokesperson for Hyundai said the company had imported Argentine crude in August and will “consider additional imports after reviewing their economic viability and compatibility with our facilities.”

Taiyo declined to comment. Eneos, PetroChina and Yanchang didn’t immediately respond to emailed requests for comment.

Medanito was assessed at a discount of US$1 per barrel to benchmark ICE Brent prices by Argus Media on Friday. That’s the narrowest discount since mid-June.

Exports to Asia averaged a record 35,000 barrels a day this year, according to Argentine data through to July, more than five times the average of 2025. The South American nation has boosted drilling for Medanito from the Vaca Muerta shale formation as its energy sector undergoes a revival under the administration of President Javier Milei.

The appeal of Medanito is that it’s both cheaper than similar-quality WTI and doesn’t need to pass through any chokepoints to get to Asia. The grade is sold at a discount of around US$1 to US$2 a barrel compared with US oil, the traders said. Oil is transported around the southern tip of South America before crossing the Pacific Ocean to Asia, and doesn’t need to transit the Panama Canal or Suez Canal.

There are some infrastructure constraints to exports by sea, with Argentina’s ports only able to load Aframax vessels, rather than very large crude carriers. The Vaca Muerta Oil Sur project, scheduled to come online next year, should help alleviate these issues and boost shipments further. The project includes a crude pipeline and a terminal that can berth some of the largest tankers.