US oil challenges Middle Eastern crude in Asian market

Bloomberg/Fuel Fix:

The rivalry between U.S. and Middle Eastern oil producers has jumped a notch as American crude makes its way right to the heart of Asia, the world’s most-prized energy market.

Royal Dutch Shell Plc has offered a cargo of U.S. West Texas Intermediate Midland crude that’s priced off the Dubai benchmark in its debut during Asian hours on S&P Global Platts’ widely-referenced trading platform, according to two traders and data compiled by Bloomberg.

Offering the shipment -- scheduled to be delivered to Singapore, or Linggi or Nipah in Malaysia -- against the Middle East’s oil benchmark brings it into direct competition with Gulf grades produced in Saudi Arabia, Abu Dhabi and Qatar. Once considered a one-off arbitrage, the flow of American oil to Asia has increased in recent years.
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While U.S. shipments of grades such as WTI Midland and Eagleford are typically priced off the American benchmark WTI, Shell’s offer makes it easier for buyers to compare it against similar-quality oil that refiners across South Korea, Japan and China typically take. The crude can be transferred to other vessels in the Malacca Strait near Singapore, making the logistics less complicated for buyers across Asia.
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This is happening at a time when shipments through the Straits of Hormuz are getting dicier because of Iran's state piracy.  It is also happening at a time when Middle Eastern producers are trying to restrict the supply of crude in order to maintain the price.