Iran stores sour oil as buyers favour sweeter blends.
IRAN is storing around 13m tonnes of crude on seven tankers as it experiences difficulties attracting buyers for its sour crude oil at a time when refiners require sweeter blends to produce gasoline, writes Martyn Wingrove.
Six of the country"s state-controlled very large crude carriers and one suezmax tanker are being used to store the crude, mostly in the Middle East Gulf, according to a London shipbroking analyst. He said it was common for Iran to put unsold sour crude into temporary floating storage and sell it in phases at a slower pace later in the year.
Iran"s move has increased the volume of crude in floating storage and taken six VLCCs out of the spot market fleet, the analyst said.
The crude oil is being stored on the 2009-built Dadgar and Mazyonah VLCCs, both moored in the Singapore area, as well as the 2008-built VLCCs Haraz and Honar , the 2004-built Darab and the 1996-built Najm.
The one suezmax tanker being used is the 2009-built Sarv , which is outside the Asaluyeh terminal in Iran, according to Lloyd"s Marine Intelligence Unit.
Other oil companies, such as Shell, had also experienced trouble selling sour crude to refiners who wanted sweet crudes instead, the analyst said.
Asian, US and European refiners will soon start to reduce buying crude cargoes as they prepare for the second quarter maintenance period.
Usually, refining output falls in the second quarter as refiners turn around their facilities to produce less heating oil and more gasoline to meet seasonal demand. Stringent gasoline specifications in Europe and the US mean refiners are more inclined to buy sweet crude.