Register with us today

and in less than 60 seconds continue your access to:Latest news headlinesAnalytical topics and featuresCommodities videos, podcast & blogsSample market prices & dataSpecial reportsSubscriber notes & daily commodity email alerts

Already have an account?

Log in to register

Forgot Password

Please Note: Platts Market Center subscribers can only reset passwords via the Platts Market Center

Enter your Email ID below and we will send you an email with your password.

  • Email Address* Please enter email address.

If you are a premium subscriber, we are unable to send you your password for security reasons. Please contact the Client Services team.

If you are a Platts Market Center subscriber, to reset your password go to the Platts Market Center to reset your password.

In this list

Analysis: Asian refiners may lift some Middle East crude in smaller vessels post sabotage

Commodities | Agriculture | Grains | Oil | Crude Oil | Jet Fuel | Petrochemicals | Coronavirus

Market Movers Americas, Aug 10-14: PVC demand bounces back from six-week decline


Platts Market Data – Oil

Capital Markets | Commodities | Oil | Crude Oil | Refined Products | Fuel Oil | Gasoline | Jet Fuel | Naphtha | Marine Fuels | Equities | Financial Services | Banking | Non-banks | Private Markets

North American Crude Oil Summit, 3rd annual

Metals | Steel

ArcelorMittal to build electric arc furnace at AM/NS Calvert sheet steel mill

Analysis: Asian refiners may lift some Middle East crude in smaller vessels post sabotage


Asian refiners seek safer passage of Middle East term crude cargoes

Some refiners consider lifting Middle East crudes in smaller ships

Dubai crude price structure may extend rally on supply concerns

Singapore — Various Asian buyers of Middle Eastern crude oil expressed some concerns over the safe passage of their term cargoes following the recent sabotage attack on Saudi oil tankers, prompting several refiners to consider lifting Persian Gulf barrels in smaller vessels as a means of reducing supply disruption risk.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

Saudi Aramco's term crude oil customers in South Korea, China, Thailand and Japan have adopted additional precautionary measures in lifting and bringing in their May-loading term cargoes, refinery sources told S&P Global Platts.

"We have been making numerous calls to the ships' captains and all relevant logistics management personnel to ensure the safety of the crew, and we are still discussing the most safe and efficient passage options for the cargoes," an official at South Korea's biggest refiner SK Innovation said.

South Korea's Middle East crude imports

Saudi Arabia's oil minister Khalid Al Falih said two of the kingdom's oil tankers faced a "sabotage attack" off the coast of Fujairah, UAE, on Sunday, the Saudi Press Agency reported Monday.

The tankers were on their way to cross the Arabian Gulf, with one of them scheduled to load Saudi crude from the port of Ras Tanura for delivery to Saudi Aramco's customers in the US, SPA said, citing Falih.

According to a survey of major refiners in Asia conducted by S&P Global Platts, at least five companies in South Korea, China, Japan and Southeast Asia said they may consider lifting some Saudi or other Middle Eastern crude and condensate in smaller vessels in the event of additional hostilities on oil tankers in the region.

China's Sinopec may possibly consider lifting some of its term Middle Eastern crude barrels in smaller vessels, rather than using entirely VLCCs, if such incidents occur frequently, a source at the state-run refiner told Platts.

"Two reasons really, smaller vessels can travel faster and would probably draw less attention from any hostile forces," a feedstock procurement manager at a Southeast Asian refiner said.

"Two Suezmax tankers, rather than a VLCC ... this will be a lot more expensive obviously, so it's not the best option to take but it's still one of the options," a trading source at Hanwha Total Petrochemical said.

Tensions have risen in the Middle East since the US waivers ended on Iran's shipments of crude. The US has reasserted its commitment to safeguard shipping in the region in response to Iranian threats to disrupt the Strait of Hormuz, the world's largest crude oil shipping chokepoint.

Some 30% of all maritime oil trade moves through the Hormuz, according to the US Energy Information Administration.


Dubai crude market structure

The Dubai crude market structure could extend the upward momentum as the latest trade route disruption in Persian Gulf waters could further tighten medium sour crude and condensate supply for Asian consumers, market participants said.

Sentiment for Middle East sour crude cargoes has been riding the bullish momentum over the past several weeks amid sharply reduced Venezuelan crude exports.

In addition, the US announced in late April that it was not extending waivers on Iranian sanctions, effectively barring Asian end-users, the largest buyers of Iranian crude and condensate, from any Iranian oil purchases.

The Dubai cash to swap spread, an indicator of sentiment in the Middle East sour crude market, was assessed at $2.48/b Friday, up 20 cents/b on the day.

This was the highest the spread has been since November 27, 2013, when it was at $2.56/b.

Similarly, the Oman spread to Dubai swap rose 11 cents/b on the day to be assessed at $3.14/b Friday, the highest since September 18, 2013, when it was at $3.19/b.

Despite Asia's growing appetite for US and African crude amid ongoing efforts to diversify crude supply sources amid OPEC production cuts, Middle East producers remain the biggest refinery feedstock supplier to East Asia.

South Korea imported 202.12 million barrels of crude from the Middle East in Q1, which accounted for 72.5% of its total imports of 278.69 million barrels, according to latest data from state-run Korea National Oil Corp.

"We are much concerned about the situation around the Strait of Hormuz. The area is a vital oil shipping route because South Korean refiners still depend heavily on Middle East crude," an official at another South Korean refiner said. "We are very closely watching the situation, and we hope there would be no problems in loading [South Korean] cargoes out there."

Japan received 1.273 million b/d of crude from Saudi Arabia in March, accounting for nearly 40% of the Asian buyer's total oil imports for the month, latest data from the Ministry of Economy, Trade and Industry showed.

-- Analysis by Gawoon Philip Vahn,

-- Andrew Toh,

-- Claudia Carpenter,

-- Daisy Xu,

-- Edited by Geetha Narayanasamy,