Asia will require an additional 300,000 barrels per day (bpd) of low-sulphur or sweet crudes
in 2014 compared with last year, to meet demand from new refineries and for blending with cheaper, low quality oil, according to an oil company analyst.
The Nigerian assessments are for two sweet crudes
- Akpo and Bonga.
This led to an increase in supplies of light, sweet crudes
The bulk of the crude oil produced by OPEC is sour, or high sulphur, while sweet crudes
, like Libyan barrels, are highly prized for making transport fuels that have tight sulphur restrictions.
The company will seek offers for Asian sweet crudes
as well as West African grades such as Qua Iboe or Escravos for March arrival, Nawazier, president and managing director of Petral told Reuters.
70 when the January cargoes were awarded, providing some support to fuel oil-rich heavy sweet crudes
The IEA economists also noted that "readily available heavy sour crudes were neither a practical nor economically viable substitute for light sweet crudes
due to already-stretched refining capacity and the narrow price discount offered by many producers for their heavy/sour grades.
But to keep its competitive edge, due to decreased demand for sweet crudes
, the premium was eliminated for July 1999 deliveries (see below).
The company also lacks heavy crude capacity, limiting the company's flexibility to only higher priced light sweet crudes
, but also lacks the higher costs associated with these facilities.
Libya's light sweet crudes
produce high yields of jet and low-sulphur diesel, and refiners are struggling to find similar quality alternatives.
Minas, the benchmark for heavy sweet crudes
sold in Asia, such as Nile Blend, normally trades below light sweet Brent crude, except at times of acute power shortages in Japan.
Markets were vulnerable to DOE's actions because sweet crude
supplies are limited and because sweet crudes
are the critical ingredient for production of ultra-low-sulfur diesel fuel, the product refiners now must supply to consumers in the United States, Europe, and Japan.