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Two South Korean refiners have bought an unspecified amount of U.S. superlight to test it as a potential replacement for Iranian condensate, Reuters reports, citing sources. The country is currently negotiating an extension of the sanction waiver Washington granted it last November.
Whatever the outcome of those negotiations, South Korean refiners are preparing for low Iranian condensate intake as the U.S. plans to reduce the amount of oil it permits Iranian oil buyers to continue importing in line with its goal to cut the country’s oil exports to zero.
The buyers of the U.S. light, the source said, are South Korea’s largest refiner, SK Energy, and its smallest one, Hyundai Oilbank.
“The crude’s API seems to be 48 degrees so in a way it’s possible (to replace Iranian condensate) but again we need to check the oil’s quality,” Reuters quoted one of its sources as saying.
South Korea is a major importer of Iranian condensate, but light crude from the U.S. shale patch—especially the Permian—is comparable in terms of properties. The light grades are used to produce naphtha, a feedstock for petrochemicals.
According to the Reuters sources, the seller of the light crude is Anadarko, although the company did not confirm this particular export. A spokesman only said Anadarko was exporting West Texas Light and added the company expected that “those volumes will continue to grow in the future.”
South Korea is already a big buyer of U.S. crude, not least because it’s close political ties to Washington and a willingness to keep things this way. According to a recent analysis from S&P Global Platts, it could import up to 40 million barrels of U.S. crude in the first half of this year alone, especially since U.S. light crude has become cheaper than heavier Saudi grades that the country had been importing.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.