Asian Refiners Increase Argentinian Crude Imports Amid Middle East War

Refiners in Japan, South Korea, and China have increased purchases of Medanito crude oil from Argentina to mitigate supply disruptions caused by the war in Iran. Sourced from the Vaca Muerta shale formation, the Medanito grade is comparable to US West Texas Intermediate but sells at a discount of $1 to $2 per barrel.

The Government of Argentina is expanding drilling operations to meet this demand. The Vaca Muerta Oil Sur project is scheduled to launch next year to improve port infrastructure, which will allow the use of larger tankers. Current exports to Asia reached a record average of 35,000 barrels a day through July 2026, though volumes remain small compared to major global producers.

Buyers include Japanese firms Eneos Holdings Inc. and Taiyo Oil Co., South Korea's Hyundai Oilbank Co., and Chinese companies PetroChina Co. and Shaanxi Yanchang Petroleum. The oil provides a strategic advantage by avoiding major maritime chokepoints such as the Suez and Panama Canals, instead transporting around the southern tip of South America.