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Kuwait Petroleum Corp (KPC) has set the official selling prices (OSPs) for its new Super Light Crude grade at a premium to a similar Saudi grade for October and November, Platts reported on Wednesday, quoting industry sources.
The first cargoes of the new Super Light Crude from Kuwait were loaded to Japan and South Korea in July, with Asian economists and market sources saying that the new Kuwaiti super-light grade could be an alternative to Iranian condensate for Asian buyers amid the returning U.S. sanctions on Iran’s petroleum sector.
Japan and South Korea were buying Iranian condensate and crude oil, but ahead of the U.S. sanctions they have halted all imports from Iran.
South Korea, for example, imported zero Iranian oil in September for the first time in six years.
Japanese refiners, for their part, have stopped buying Iranian crude ahead of the November 4 deadline set by Washington to all countries doing business with Iran before economic sanctions return. The head of the Petroleum Association of Japan said last month that “It is my view that each firm is taking the same stance and temporarily suspending (the loading) and watching the situation carefully.”
With Asian refiners looking for alternative supplies to Iranian crude oil and condensate, Kuwait’s new super light grade could find a welcome home in the Asian markets.
Kuwait’s OSPs for its Super Light Crude for October was set at a premium of US$2.30 a barrel over the Oman/Dubai average, while the November OSP was set at US$3.05 per barrel above Oman/Dubai.
To compare, Saudi Aramco’s OSP for October for its Arab Extra Light to Asia is at a US$1.80/b premium to Oman/Dubai, while the November OSP was set at a US$2.55/b premium.
Kuwait’s new Super Light is “rightly priced” at a premium to the Saudi grade, a source at a refiner in northeast Asia told Platts.
Kuwait plans to have Super Light production reach 120,000 bpd, according to Reuters.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.