OPEC’s fourth-largest producer said it would assess the situation in more of October and November before material is promised for the first quarter of 2022.
Oil producer Kuwait Petroleum Corp. (KPC) is in talks to shorten its annual supply contracts with some customers in India and Japan to nine months this year to meet demand from its new foundry, sources closes the reported case. Reuters.
At a meeting with Indian refineries this month, KPC officials said the state-owned company’s next oil supply contracts with Indian buyers would run from April to December, the sourcessaid, rather than March 2022.
The fourth largest representative in the Organization of Petroleum Exporting Countries (OPEC) said it would assess the situation in more October and November before supply is promised for the first quarter of 2022, the stores.
The proposed change comes after a decision by Iraq, OPEC’s second largest producer, to cut its oil exports to India this year to comply with OPEC quotas just as Indian refineries are ramping up production to meet rising demand as the world’s third largest crude importer emerged. from the COVID-19 pandemic.
Al-Zour brewing 615,000 KPC per day, the country’s fourth, is expected to start operating near the end of the year, turning the country into one of the largest fuel producers in the region, sources said.
“The company is aligning and negotiating its contracts with customers as domestic demand rises early next year. To avoid a full-year commitment, KPC has reduced the contract period to nine months, ”said one source, adding that KPC will once again sign 12-month contracts from April 2022.
KPC did not respond Reuters’ email request for comment.
Supply cracking
Indian refineries had introduced ramp design of Kuwaiti oil this year after Iraq cut off the thermal supply of the Basra Lightgrade this year, sources said.
Bharat Petroleum Corp. has sought a 25% increase in its KPC stores to 60,000 bpd with an option to purchase an additional 50,000 bpd for 2021/22. The company had the option to purchase 28,000 bpd in this financial year to March 31, the sources said.
Mangalore Refinery and Petrochemicals was another Indian refinery that wanted to increase the size of contracts, seeking a 14% increase to 40,000 bpd while raising optional purchase volumes to 15,000 bpd. from 10,000 bpd in 2020/21.
Indian Oil Corp., meanwhile, wants to cut its contract size to 100,000 bpd from 120,000 bpd but is trying to raise optional sizes to 50,000 from 30,000 bpd.
The three refiners did not respond Reuters’ email requests for comments.
The refiners and KPC are still negotiating books under the new supply contracts while a Japanese refiner talks about the length of its contract, the sources added.