SINGAPORE/HOUSTON - Oil traders in Asia are running the numbers on importing Alaskan crude, after the end of a four-decade ban on U.S. exports also eliminated a costly tanker requirement for shipping North Slope oil overseas. Although Alaskan crude was one of the few domestic varieties effectively exempt from the export ban, exporters were required under the Jones Act rules to use vessels from a small fleet of U.S.-flagged tankers. Flows to Asia reached nearly 200,000 barrels per day (bpd) in the late 1990s, but then came to a halt due to dwindling production and expensive freight rates. However, last month Congress rolled back the export ban, and with it the tanker restriction. This theoretically allows buyers to cut $2 to $3 a barrel off their shipping costs to Asia by booking sales on cheaper foreign-flagged tankers, traders say. For now, traders say the numbers still don’t quite add up, and no fixtures have been booked in recent weeks. U.S. domestic crude prices have been rising relative to global benchmark Brent, while Middle East marker Dubai has weakened. And much of Alaska’s production is effectively tied up with long-term charters on U.S. vessels that cannot be easily redeployed. “The opportunity is more open than before, but the economics are not that attractive just now,” a trader with an Asian refiner said. For example, Oman crude, a Middle Eastern grade similar in quality to Alaska North Slope (ANS), delivered to North Asia on a Very Large Crude Carrier would cost about $30.60 a barrel, including freight. Meanwhile, ANS <CL-ANSW> costs closer to $31.80 a barrel including $3 per barrel in freight costs on a Suezmax tanker, according to calculations by Reuters and trade sources. Alaska North Slope has been at roughly a $3 to $4 per barrel discount to the similar Russian ESPO blend so far this month. Freight costs from the Russian port of Kozmino to South Korea are currently about 80 cents per barrel. Even so, medium-sour Alaskan crude fits well with most Asian refineries that are geared towards processing high-sulphur Middle East crude, dealers say, and shipping time is half the four-week journey from the Gulf. While the first unfettered exports of U.S. crude have set sail this week from the Gulf of Mexico to Europe, some traders reckon the trans-Pacific route may be ultimately emerge as the better long-term trade outlet for U.S. crude. “This is clearly on people’s radar now,” said an oil trader in Singapore working for a U.S. company. A GOOD FIT If buyers emerge, they most likely will come from South Korea, whose refiner GS Caltex imported the country’s first Alaskan crude cargo in a decade in October 2014, and a second one in May, both on U.S.-flagged vessels. Those were lone shipments, but whet the firm’s appetite. “We’ll keep our eyes on the economic feasibility of Alaskan oil,” said a spokesman. The South Korean government and refiners last month welcomed the repeal of the 40-year-old crude export ban, saying they see it as an opportunity to diversify oil supplies. U.S. officials have been quick to dispel confusion about whether the bill lifting the export ban would also eliminate the requirement to use U.S.-flagged tankers. “The legislation fully repeals all restrictions on exporting crude oil, including the outdated mandates on shipping Alaskan energy,” said Michael Tadeo, deputy communications director for the Senate Committee on Energy and Natural Resources. MUTED FOR NOW For the moment, however, the arbitrage is hypothetical. For a variety of reasons, major Alaskan oil producers such as ExxonMobil, ConocoPhillips and BP are likely to keep sending most of their crude to refiners on the U.S. West Coast, their principal market for decades, traders say. The companies run their own Jones Act vessels dedicated to the Alaskan crude trade and some of their refineries are geared toward processing the grade. Still, the easing of the current restrictions could facilitate exports of North Slope crude when arbitrage opportunities arise. “I think they will try to move cargoes to the East (Asia) more actively than before and offer more attractive prices,” the refining trader from Asia said.