Refiners report Middle East crude cargoes loading, crusing safely
2023 Saudi crude imports up 0.7% at 341.84 million barrels
Kazakh CPC crude cargoes take Cape of Good Hope route
South Korea’s Trade Ministry and main native refiners count on tensions surrounding the Strait of Hormuz and Houthi militant exercise to hardly impede the nation’s Middle Eastern crude imports, however some CPC Blend crude cargoes could witness delays in arrival as they take the longer Cape of Good Hope route , refinery and authorities sources stated Jan. 14-16.
There is not any disruption in crude oil shipments from the Middle East up to now, the Ministry of Trade, Industry and Energy stated in a press release after it held an emergency assembly with main refiners, together with SK Innovation and S-Oil on Jan. 14, to verify on crude provides and commerce flows from the Persian Gulf market.
South Korean refiners’ time period and spot buy bitter crude cargoes are loading and crusing with none main issues, officers and feedstock managers at three main South Korean refiners informed S&P Global Commodity Insights Jan. 16.
The authorities and refiners are carefully monitoring the scenario within the Persian Gulf and Red Sea waters, attempting to make all-out efforts to safe steady provides, MOTIE stated.
On Jan. 11, Iranian navy had issued a press release confirming {that a} tanker carrying Iraqi crude had been seized within the straits of Hormuz by the Iranian navy.
Any disturbances on the Strait of Hormuz would ship a extreme blow to South Korea because the nation depends closely on Middle Eastern crude. However, South Korea-bound tankers carrying numerous Persian Gulf crude grades have hardly sensed any hazard up to now and it’s unlikely for Iran to grab or goal a number of vessels, particularly these headed to the Far East, feedstock buying and selling and stock managers at two main South Korean refiners, together with S-Oil, stated.
South Korea’s crude imports from its prime provider Saudi Arabia, excluding shipments from the Saudi-Kuwaiti Neutral Zone, rose 6.5% yr on yr to 32.41 million barrels in December, newest knowledge from Korea Customs Service confirmed.
In 2023, Asia’s third largest crude importer obtained 341.84 million barrels from Saudi Arabia, up 0.7% from 2022, regardless of the OPEC kingpin’s dedication to chop manufacturing, the customs knowledge confirmed.
CPC Blend crude
The authorities and refiners indicated that shipments of Kazakhstan’s mild candy CPC Blend are in danger because of the escalating safety threats across the Red Sea.
CPC Blend crude first will get delivered from manufacturing services to the Russian Black Sea port of Novorossiisk through the Tengiz-Black Sea pipeline earlier than crusing by means of the Suez Canal to succeed in South Korean ports.
CPC Blend crude cargoes for South Korea have detoured the Suez Canal to take the longer Cape of Good Hope route, in accordance with refinery sources with direct information of the matter.
Asian refiners’ dependency on the Red Sea delivery route for his or her total crude imports is minuscule. Almost the entire US, Latin American and West African crude cargoes usually journey to the Far East through the southern tip of South Africa.
However, small volumes of Libya’s El Sharara, Mesla Blend and Mellitah condensate, in addition to Algeria’s Saharan Blend, Kazakhstan’s CPC Blend and Azerbaijan’s Azeri Light are delivered in Suezmaxes or smaller tankers that cross by means of the Suez Canal and the Red Sea route earlier than reaching the Far East vacation spot.
South Korea frequently imports round 2-5 million barrels/month of CPC Blend crude, however refiners stated they might reduce down on the sunshine candy crude purchases as delivery prices development sharply greater, whereas as much as two weeks of supply delays can be anticipated for first -Quarter loading cargoes bought, refinery and feedstock administration sources stated.
US crude
Refiners, in the meantime, indicated that logistical dangers and better delivery prices for CPC Blend crude would hardly harm their month-to-month feedstock procurement plans, as there are ample different provide choices.
“The Suez Canal and the Red Sea have been by no means an essential oil commerce route for South Korea,” a bitter crude and condensate stock supervisor at a refiner based mostly in Ulsan stated.
South Korea doesn’t essentially must depend upon North African and Mediterranean provides, as there may be loads of mild candy US crude being supplied, feedstock managers at two refiners stated.
Shipments of US crude in December, largely mild candy grades, together with WTI Midland, rose 18.9% yr on yr to fifteen.7 million barrels, the customs knowledge confirmed, marking the most important quantity since 15.09 million barrels obtained in January 2022.
In complete, the world’s fourth-biggest crude importer obtained 88.22 million barrels, or 2.85 million b/d, of crude oil final month.
For the total yr 2023, South Korea imported 1,004.1 million barrels of crude, down 2.6% from 1,031.28. million barrels imported in 2022, the customs knowledge confirmed.
State-run Korea National Oil Corp. is anticipated to launch extra detailed oil commerce knowledge for December and the total calendar yr 2023, together with shipments from different main crude suppliers, import prices and stockpiles, after Jan. 26.