Peru’s niche Bretaña crude oil gains traction in US markets: here’s why

(Originally posted on : Invezz )

Bretaña, a heavy sweet crude from the Peruvian Amazon, is gaining popularity in the US market as crude oil imports shift.

The first cargo of Bretaña was recently unloaded to the Gulf of Mexico, adding another source for US refiners looking for alternatives to dwindling Mexican heavy crude reserves.

As oil output in the US evolves, Bretaña’s import strategy may shift.

Journey of Bretaña crude

Bretaña crude oil is a popular choice among refiners due to its low metal concentration, and heavy, and sweet properties.

This type of oil is extracted from the Peruvian side of the Amazon rainforest and transported to the Amazon River by barge before being loaded into larger vessels at Brazilian ports and exported to international markets.

On January 2, the tanker Radiant Pride delivered 300,000 barrels of Bretaña to Houston, Texas, marking its first delivery in the United States.

Kpler and LSEG tracked the shipment, which is significant for Bretaña’s entry into the localized crude oil market.

According to Reuters, the cargo was said to have been purchased by Shell, a major participant in the oil business, highlighting the rising interest in this new crude option.

A response to declining Mexican supply

Bretaña’s increased popularity is a response to the decrease in US imports of heavy sour crude from Mexico.

Imports from Mexico fell to a new low in 2024 as the country struggled with oil production issues, prompting the decision to keep more crude for domestic processing purposes.

This shift in market balance has left a hole in the US market, therefore refiners have been looking for additional crude oil sources to maintain functioning and meet demand.

Matt Smith, a leading analyst at Kpler, emphasized this trend, saying:

“Due to the slump in heavy sour crude from Mexico over the past year to the US Gulf Coast, we are now witnessing the arrival of new heavy grades pulled in to backfill this loss – this is a trend we only expect to develop further.”

The search for alternatives, such as Bretaña, reflects U.S. refiners’ evolving objectives and strategies in the ever-changing global oil economy.

Market potential and prospects

Bretaña’s debut in the US market is unique as it was produced in 2018. This represents a new strategy for supplying heavy crude oil to US refiners.

Last year, Marathon Petroleum and PBF Energy effectively incorporated Bretaña at its Pacific Ocean ports, demonstrating increased trust in this crude grade.

Improved refinery operations in the United States may enhance demand for Bretaña, which is also environmentally friendly.

The use of alternative crude oil sources may allow US refiners to operate more efficiently, while simultaneously increasing the risk of dependence on depleting Mexican suppliers.

Environmental considerations

Bretaña crude’s low metal content presents an opportunity for refiners to reduce pollution during processing, along with societal shifts towards sustainable energy.

This possibility is important for the oil industry as a whole, as environmental concerns influence purchasing strategy and operational practices.

The purchase of heavy crude oil with reduced pollutants is an advantage that can be used in the competitive arena of a market that is now more environmentally conscious.

Bretaña presents a compelling opportunity

The introduction of Peru’s Bretaña crude oil in the US market marks a significant milestone for both the new product and the refiners’ efforts to balance supply and demand.

Bretaña’s unique attributes, combined with the drop in Mexican imports, present an opportunity to thrive in the oil market and usher in a new era of heavy crude sourcing.

As the market evolves, Bretaña’s development potential will be evaluated in comparison to other participants in the US crude oil outlet market.

The post Peru’s niche Bretaña crude oil gains traction in US markets: here’s why appeared first on Invezz

Source link