Qatari crude competing heavily in Japan

Apr 29, 1998 02:00 AM

Qatari Al-Shaheen crude has an API gravity of 30.6 degrees, with sulphur content of 2.1 % which is similar in quality to Dubai Fateh crude, traders said.
Al-Rayyan has an API of 24.4, with 3.2 % sulphur content. Japan's Al-Shaheen imports jumped to 100,000-120,000 bpd in 1997 from 20,000 bpd in the previous year, as refiners favoured the medium grade as an alternative to lighter grades from Iran, Kuwait, and Saudi Arabia, officials at the Petroleum Association of Japan said.
The new crudes came onstream in early 1996.
An increase in production of other, more traditional Qatari grades such as Marine and Land also helped boost Japanese crude imports from the country in 1997, the officials said.
'On the pricing front, Japanese buyers have benefited from Al-Shaheen's spot prices which were assessed at a large discount from its official selling price (OSP) and were also heavily beaten down in the market,' said a trading house source.
Traders at domestic refiners said they expect Al-Shaheen spot prices to remain more competitive than Dubai and therefore continue to find a home in the Japanese market in the coming months.
Some traders warned that the new Qatari grades risk losing their appeal due to quality fluctuations, in particular the level of water present.
But the Cosmo Oil trader disagreed. 'The water problem has been solved as the storage vessels were improved. We find the quality of Al-Shaheen is now more or less satisfactory.'
In the first quarter, the UAE was Japan's largest crude source, supplying 1.14 mm bpd , 5.4 % less than in the same quarter of 1997. The second-largest supplier in the January-March period was Saudi Arabia, at 1.07 mm bpd , down 7.2 % from a year before.
Exports from Oman and Iran in the first quarter were more severely affected by Qatar's sales expansion in Japan, the traders said.
Omani crude exports in the period plunged 18.2 % from a year before to 3.576 mm kiloliters or 250,000 bpd , while exports from Iran also dropped 18.3 % to 8.950 mm kiloliters or 625,400 bpd .

Source: not available
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