Asia buys up African, Brazilian oil as shipping costs fall

12/11/2026 03:43 AST

Asian buyers have been snapping up Atlantic Basin crude at lower prices after tanker freight rates on cargoes from Africa and Brazil slumped from all-time highs, traders, shipbrokers and analysts said.

Unipec, the trading arm of the world's top refiner Sinopec , bought some African cargoes last week. Both it and South Korea's largest refiner SK Energy have chartered vessels at much lower rates to load West African grades in December, the people said.

A major buyer of West African and Brazilian oil, Unipec bought two cargoes of Congolese Djeno crude from at discounts of about $22 a barrel to dated Brent on a free-on-board basis last week, two people who deal in West African grades said.

The Chinese trader has also provisionally chartered two Suezmax-sized tankers to load West African crude for Asia at worldscale rates of 475 and 410 in late November to early December, and a very large crude carrier (VLCC) on the same route for loading in early December at W500, according to ship brokerages. Worldscale is an industry tool to calculate freight charges.

Similarly, South Korea's top refiner SK Energy has provisionally chartered a Suezmax to load at Gabon for Ulsan in December at W380.

Sinopec did not immediately respond to a request for comment. SK Energy declined to comment.

"Softer long-haul VLCC freight rates are making west of Suez grades more attractive," analysts at consultancy Energy Aspects said in a November 9 note.

Elevated premiums for rival Russian ESPO crude should also support Chinese demand for heavier Angolan grades, they added.

SHARP CORRECTION IN FREIGHT RATES
Last month, Asia's oil costs surged after freight rates across all types of tankers hit record levels as Middle Eastern producers cranked up exports, requiring more vessels to conduct ship-to-ship transfers outside the Strait of Hormuz to avoid attacks linked to the US war on Iran.

A switch by Chinese independent refiners to non-sanctioned oil after a US blockade cut off Iranian exports, and their rush to use up crude import quotas by year-end also increased tanker demand.

However, Asian refiners held back purchases in recent weeks due to high costs, depressing spot prices, while more vessels are available for hire after delivering oil, leading to a sharp correction in freight rates, the people said.

Costs of delivered African and Brazilian crude to China have fallen $5 to $10 a barrel from last month, said a trader who closely tracks these deals.

Freight rates for VLCCs, excluding loadings inside the Hormuz strait, as well as for Suezmax and Aframax tankers, have fallen about 50 percent from their peaks last month, Baltic Exchange data showed.

"The recent freight correction has been driven by improving vessel availability following October's exceptional market tightness," Wanying Zhang, Vortexa's shipping analyst, said. "The number of laden mainstream VLCCs and Suezmaxes in East Asia has increased by approximately 15 percent since early September, suggesting a growing pool of vessels that could become available as they complete discharge operations."

ANGOLAN, BRAZILIAN CRUDE BECOME AFFORDABLE
Meanwhile, costs for Angolan and Brazilian crude to be delivered in coming months to the world's largest importer China have also eased.

Separately, a Chinese independent refiner based in eastern Shandong province bought 1 million barrels of Angolan Plutonio crude for delivery in late December or early January at about $15 above ICE Brent, two traders said.

A fortnight ago, Angolan grades traded at premiums of more than $20, they added.

Brazilian Tupi crude last traded at a premium of $7-$8 a barrel to December dated Brent for January arrival, another trader said, versus deals at premiums near $20 last month.

Offers for Brazilian and West African crude jumped to more than $20 and $40 a barrel, respectively, last month, traders said. For US West Texas Intermediate crude, Asian buyers continue to ship cargoes using Aframax-sized tankers that can carry 500,000 to 700,000 barrels of oil as freight rates for VLCCs remain elevated despite having eased from peak levels, traders said.

Even as WTI prices have fallen, rival Abu Dhabi Murban crude was still cheaper by about $2 a barrel, one of them said.

Reuters