Ship-to-ship Oil Transfers Outside Hormuz Offered by Kuwait Petroleum

Kuwait Petroleum Corporation is offering the option of ship-to-ship transfers of its crude oil and petroleum products outside the Strait of Hormuz to its buyers for safe transportation to final destinations, a company official said on Wednesday.

“We are offering the STS option for supplying both crude and petroleum products to attract buyers,” Khaled A. Al-Sabah, managing director of international marketing at KPC, told Reuters at the APPEC industry conference.

He said buyers and shipping companies are avoiding lifting cargoes from ports inside the strait due to risks amid the US-Iran war.

Other Middle Eastern producers such as Qatar, United Arab Emirates and Iraq are also offering crude to buyers for sale from ports outside the strait.

“Whenever it is safe, we are passing some ships through the Strait of Hormuz and we are giving options to do STS operations outside the Strait of Hormuz,” Emad A. M. Al-Kandari, deputy managing director of international marketing at KPC, said.

The company recently offered naphtha on a delivered ex-ship basis in a handful of tenders in August and September, documents reviewed by Reuters showed.

Some of its cargoes were sold at premiums of up to $60 per tonne to Japan quotes on a delivered basis, market sources said.

KPC typically offered naphtha on a free-on-board basis before the US-Iran war started. It resumed cargo offers in June for the first time since the war began in February.

Kuwait exported about 200,000 barrels per day of naphtha on average in the first two months of this year, which dropped to zero in April, data from shiptracker Kpler showed. Its exports in the last two months have remained half of pre-war levels.