Gulf Times - Asian Refiners Push Back - Want Light Sweet, Saudis Offering More Heavy Sour

[hatrack]

SINGAPORE: Saudi Arabia may find itself unable to fully serve its crude oil customers in Asia, the most important market for Middle East producers, as refiners are reluctant to accept the grades being offered.

Asian refiners want increased supplies of the lighter grades of crude to produce more expensive cleaner-burning fuels while Saudi Arabia is offering more of the heavy, high-sulphur grades.

Despite a surprise announcement by Saudi Oil Minister Ali Naimi about three weeks ago that the kingdom had ramped up output by 300,000 bpd or more than 3% from May 10, none of the additional barrels are likely to have been loaded onto tankers bound for Asia.
It’s not that state-owned Saudi Arabian Oil Co, better known as Saudi Aramco, is holding back shipments.
“We haven’t asked for incremental cargoes so we don’t expect to be given any,” an official with a leading South Korean refiner said yesterday.
Late Wednesday, Saudi Aramco notified term customers in Asia, mostly Japanese and South Korean refiners, that it will supply full contracted crude oil volumes in July. Saudi Aramco is Asia’s top crude supplier and, like Iran and Kuwait, sells its cargoes only under term contracts. Refiners, however, aren’t keen to buy more of the high-sulphur or “sour” cargoes that make up the bulk of output from these producers, due to poor margins for fuel oil and heavy products.

EDIT

http://www.gulf-times.com/site/topics/article.asp?cu_no=2&item_no=224084&version=1&template_id=48&parent_id=28

[phantom power]

1. There was a story yesterday about refineries at 88% capacity....

and the article treated it like a big mystery. I had been thinking that maybe the straightforward explanation is that most refineries are set up for light/sweet, and heavy/sour is becoming a bigger and bigger fraction of the available oil.

[RoseMead]

2. Isn't this part of what's expected

with Peak Oil?

[phantom power]

4. Yes, decline in oil quality is part of the predicted scenario.

[GliderGuider]

5. Yes, it is.

[Blaze Diem]

3. Guess we know where the light sweet crude of the Dakota Bakken Field is headed..

..........."And unlike the tar from Canada's oil sands, Bakken crude needs little refining. Swirl some of it in a Mason jar and it leaves a thin, honey-colored film along the sides. It's light - -almost like gasoline -- and sweet, meaning it's low in sulfur.

Best of all, the Bakken could be huge. The U.S. Geological Survey's Leigh Price, a Denver geochemist who died of a heart attack in 2000, estimated that the Bakken might hold a whopping 413 billion barrels. If so, it would dwarf Saudi Arabia's Ghawar, the world's biggest field, which has produced about 55 billion barrels."
---------

Should bring a high bid on the foreign market, no matter the cost to the planet or the people who may suffer at the hands of this business.
Oilmen in the White House, setting policy, and ignoring the Constitutional 'law of the land'.
The needs of humanity are not even part of their equation.
THIS is what their world is all about.
It sets policy, declares war, and what falls away in its path to become the biggest player on the world market, is tragic for a moment befor the next group falls away and takes its place.

The way it is, in this day & age with oilmen in the White House.

[NickB79]

7. Bakken is the fool's gold of the oil industry

Of the 400 billion potential barrels, modern technology can only extract 4 billion, per press releases over the past few months. 4 billion barrels, BTW, is only 55 days of world oil demand.

The field is a shale oil field, which is notoriously hard (ie expensive) to develop. The flow rate is pitiful compared to conventional oil fields, making it like trying to fill a pot from a dripping faucet.

[Zachstar]

6. Light Sweet? LoL what planet are you from Asia?

That stuff is only going to be found in museums at this rate. The stuff they are getting now is getting more and more to the point many refineries just can't handle.

The drenching of the sweet crude has ended.