Page 16 - DMEA Week 38 2021

DMEA NEWS IN BRIEF DMEA

Iran closer to the countries with which we more than 3 million barrels of oil per day, tracking firm Vortexa.
have some challenges, or our relations have most from the U.S. Gulf Coast. With overall South Korea has accounted for about two-
cooled or political cooperation with them has fuel demand rebounding to pre-pandemic thirds of Mars exports this year, said Kpler oil
stopped; we will be happy,” Iraj Masjedi told levels, refiners will need to make up for the analyst Matt Smith. China’s Unipec and South
Iranian state media in April. Mars shut-ins. Korea Energy boosted Mars purchases ahead
In late April, Iran said it could enter a The loss of up to 250,000 barrels per of the storm to take advantage of favourable
“new chapter” with Saudi Arabia, welcoming day (bpd) has some U.S. refiners seeking prices.
a “change of tone” from Saudi Crown Prince replacements for fourth-quarter delivery, Unipec recently bought 200,000 tonnes of
Mohammed bin Salman, who said he hoped especially Iraq’s Basrah crude, traders said. Russia’s Urals crude for October delivery amid
for improved ties with Tehran. Others received supplies of sour crude from a broader weakness in price differentials.
Representatives of Iran and Saudi Arabia U.S. storehouses. South Korea’s second largest refiner, GS
have previously held talks in Baghdad, Basrah crude has come to the fore during Caltex Corp, had a Mars cargo canceled that
facilitated by Iraqi Prime Minister Mustafa past disruptions. In 2019, when U.S. sanctions had been set to arrive in late November,
al-Kadhimi. on Venezuela cut off heavy crude grades to and the company has not yet looked for
Saudi Arabia has had a rocky relation with Gulf refiners, Iraq rapidly boosted cargoes. replacement crude, according to traders.
the Islamic Republic since 1979 when Shia Canadian heavy-oil suppliers also benefited. Unipec’s parent, Sinopec, and GS Caltex
revolutionaries came to power and pledged to Exxon Mobil and Placid Refining Co have did not reply to after-hours requests for
export their revolution to the world including received oil from the U.S. Strategic Petroleum comment.
to the Gulf counties. Iran’s support for the Reserve (SPR), addressing immediate needs REUTERS
Houthi rebels in the Yemeni civil war since for sour crude.
late 2014 has caused concerns for the Saudi “Refiners that needed to specifically replace
establishment. Mars barrels requested sour crude from the PIPELINES
RUDAW SPR. Many others are buying extra cargoes
of Basrah for October delivery, whose prices Israeli pipeline firm
were very convenient as sour crudes in
REFINING general are under pressure,” a U.S. Gulf crude embroiled in conflict over
trader said.
US refiners use Iraqi, high as a $1.50 premium over WTI but on UAE deal
Earlier this month, Mars crude traded as
Canadian crudes to replace Wednesday it was offered at a $2.25-per-barrel It was hailed as the first major partnership
to come out of the Abraham Accords – a
discount to the U.S. benchmark , returning
storm losses to pre-storm levels. Most of the nine U.S. deal in which Israel would serve as an artery
for Emirati crude to Western markets. The
refineries that halted output during Ida have
US oil refiners hunting to replace storm-lost returned to production. lucrative deal, reportedly worth hundreds
U.S. Gulf of Mexico crude have been turning Refiner Marathon Petroleum bought of millions, was inked on Oct. 19, 2020, by
to Iraqi and Canadian oil, while Asian buyers Basrah for October loading, one trader said. Israel’s state-owned Europe Asia Pipeline Co.
have been pursuing Middle Eastern and Refiners able to process and blend heavier (EAPC) and MED-RED Land Bridge Ltd., a
Russian grades, analysts and traders said. crudes also have shown interest in Canadian private Dubai-based company.
Royal Dutch Shell, the largest producer and Latin American grades, traders added. An Israeli “land bridge” transporting oil
in the U.S. Gulf of Mexico, this week said Marathon declined to comment. from Eilat on the Red Sea to Ashkelon on
damage to an offshore transfer facility will U.S. Energy Information Administration the Mediterranean already exists; it has been
limit Mars sour crude supplies into early next preliminary data through Tuesday showed operating for more than 50 years. In fact,
year. The Mars sour grade of U.S. oil is used imports from Mexico and Brazil rising after there are two pipelines between the cities: one
heavily by U.S. Gulf refiners and companies in the storms. for crude oil and one for distillates (gasoline,
South Korea and China, two top destinations Of the up to 250,000 bpd of lost Mars jet fuel, etc.). While the pipeline isn’t new,
for U.S. crude exports. crude production, about 80,000 bpd typically pumping Arab oil through it is, at least in such
The United States now generally exports are sent to Asian refineries, according to cargo a publicly celebrated manner.

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