News ID: 239484
Published: 0249 GMT February 27, 2019

Japan's Cosmo to load Iranian Heavy crude early March

Japan's Cosmo to load Iranian Heavy crude early March

Japanese refiner Cosmo Oil will load around 900,000 barrels of Iranian Heavy crude oil in early March as local refiners are rushing to lift as much barrels from Iran during the current 180-day US sanctions waivers, sources with direct knowledge of the matter told S&P Global Platts on Tuesday.

Cosmo Oil is now scheduled to load around 900,000 barrels of Iranian Heavy crude on a VLCC around March 4-5 and discharge the cargo in Japan around March 27-28 after calling at Ras Tanura in Saudi Arabia, and Zirku Island in Abu Dhabi, the sources said.

Cosmo Oil's scheduled loading of Iranian Heavy crude, however, will likely be the last loading of Iranian barrels before the current US sanctions waivers expire without clarity for extension beyond May, the sources added.

Cosmo Oil was among the first Japanese refiners along with Showa Shell, Fuji Oil to resume Iranian crude loadings in January — the first in four months — totaling around 4.9 million barrels.

This was followed by JXTG Nippon Oil and Energy resuming loadings in early February, and its parent JXTG Holdings has said it intends to suspend loading of Iranian oil in early March unless Japan secures an extension to its US sanctions waiver.

Idemitsu Kosan has also said it intends to resume its purchases of Iranian crude oil during the current US sanctions waiver.

Confusion surrounding shipping, insurance and banking rules under the US sanctions kept some countries from resuming imports after the US granted the waivers on November 5.

Meanwhile, data released late Monday showed that South Korea resumed imports of Iranian crude in January after a four-month hiatus.

The Northeast Asian nation received 1.958 million barrels of crude — all South Pars condensate — from Iran.

The shipments marked South Korea's first import of Iranian crude since September last year, when the country fully suspended crude imports from Iran due to the reimposition of US sanctions.

The cargoes were for South Korea's top refiner SK Innovation, which told S&P Global Platts earlier that it had received about two million barrels of Iran's South Pars condensate. The refiner took delivery of its first cargo of about one million barrels on January 19 and its second on January 31.

Hanwha Total is also set to take delivery of around 3-5 million barrels of South Pars condensate, a company source said.

Seoul is struggling to extend the waiver allowing it to keep buying Iranian condensate beyond May, telling the US that it was hard to find alternative sources for condensate due to limited suppliers.

Last week, South Korea's Deputy Foreign Minister Yun Kang-hyeon met Francis Fannon, assistant secretary at the US State Department's Bureau for Energy Resources in Seoul.

About 70 percent of Iranian crude brought into South Korea had been South Pars condensate and more than half of the condensate which South Korea imports had been from Iran. Other Iranian grades South Korea has imported were mostly Iran Heavy and Forozan.

South Korea imported 93.122 million barrels, or 3 mbd of crude oil in January — down 6.7 percent from 99.816 million barrels a year earlier.

This marks the second consecutive month of decline in the country's crude imports. The January imports were up 0.1 percent from December's 92.986 million barrels.

In 2018, the country's crude oil imports edged down 0.2 percent to 1,116.28 million barrels, compared with 1,118.17 million barrels in 2017.

The KNOC data also showed that South Korea's crude stockpiles jumped 20.6 percent year-on-year to 50.57 million barrels in January, which indicated that the country may continue to reduce crude imports in months to come.

   
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