South Korea buys four times more Kazakh oil instead of Iranian
South Korea imported four times more CPC Blend crude oil in 2018 than in the same period in 2017. The main Asian consumer seeks to replace Iran's oil supplies from the Caspian Pipeline Consortium, Reuters reports.
South Korea, which consumes about 3% of world oil production, increasingly buys CPC Blend, as its refineries plan to abandon imports from Iran due to US sanctions against Tehran, which come into force in November.
The import of Iranian oil to South Korea may drop to a record level in the last three years. The most noticeable drop in Seoul oil imports from Iran occurred in May, when the volume of supplies fell to 179,444 barrels per day. This is the lowest since January 2016.
As Iranian imports fell, the supply of CPC Blend grade oil to South Korea reached its maximum. In July, they exceed the figure of 284,000 barrels per day, the agency reports.
South Korea bought 4 million tonnes of CPC Blend in January-July 2018 against 1 million tonnes for the same period in 2017.
In 2018, the capacity of the pipelines of the Caspian Pipeline Consortium increased by 20% to 67 million tonnes or 1.4 million barrels per day. Due to this, the volume of exports should increase, and prices decrease.
According to representatives of the South Korea, CPC Blend is not inferior in quality to Iranian light crude oil and condensate and is sold at a competitive price.
"We bought CPC Blend of good quality, and we will continue deliveries if it is economically viable," a representative of the South Korean refinery GS Caltex said.
The traditional market for CPC Blend is Europe, where this variety is usually mixed with other classes of oil, including a heavier Ural blend from Russia.
European refineries limit the consumption of the CPC mixture due to the high content of mercaptan, the acute gas. However, more modern refineries in South Korea do not experience problems associated with mercaptan.
South Korea is the fourth major importer of CPC Blend, after Italy, the Netherlands and France.
In May 2018, US Secretary of State Mike Pompeo said that Iran is waiting for the most stringent sanctions in history and voiced demands for lifting sanctions.
He demanded Iran to review the policy in the region, calling for the renunciation of the support of the Shiite group Hezbollah, as well as allowing IAEA inspectors to the country's nuclear facilities, which is already stipulated in the agreement on the Iranian atom, from which US President Donald Trump unilaterally withdrew.
Iranian President Hassan Rouhani responded that the US has no right to dictate its rules to other countries.
By Maria Dubovaya for InformBuro (Kazakhstan).
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