Shale oil is produced by horizontal drilling and hydraulic fracturing from shale rock. Production of oil is so abundant that President Barack Obama is to sign legislation that will end the restrictions of export of oil.
But, shale oil is not economically viable for most of Asian refiners as many of the refineries can process heavier, cheaper oil with higher sulfur content but not configured for the shale kind. Also, there is a long charter time and high freight costs involved.
Oil buyers in Asia are already reaping the benefits of a global glut that’s driven prices down about 35 percent over the past year. For Japanese refiners, buying U.S. crude isn’t profitable relative to Middle East supplies.