Asian Refiners’ Demand for Sour Grades Unimpeded by Price Rises: Platts

Asian refiners will continue to depend on Middle Eastern crude grades irrespective of any price swings due to limits on their ability to take sweeter crudes, according to Platts.

• Sour crude economics will remain stronger than sweet because of the OPEC+ cuts with insufficient sour crude supply for complex refineries in India, Kuwait, Jizan, Oman and China, according to Vitol CEO Russell Hardy.
• However, Asian refiners will continue to depend heavily on Middle Eastern sour crudes, executives and trading sources told Platts.
• Instead, refiners want to secure base feedstock requirements from Middle East suppliers, even if the rising prices and higher Middle Eastern OSPs hit refining margins.
• "South Korean refineries are configured and designed to crack heavy high sulphur crude at maximum efficiency, so Middle Eastern sour grades will always be the primary feedstock," said a trading and logistics manager at a South Korean refiner on the sidelines of APPEC.