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S Korea tests US super light oil as Iran waiver uncertainty grows

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NEW YORK/SINGAPORE: South Korea has begun testing super-light US oil sold by energy firm Anadarko Petroleum Corp as a substitute for Iranian crude as it awaits word from Washington whether it can keep buying oil from the Middle Eastern nation, sources said.


South Korea is one of Iran’s biggest Asian customers, and was one of eight importers that received waivers to keep buying Iranian oil when the United States re-imposed sanctions in November.


Washington is expected to reduce those waivers in May, disrupting South Korea’s supply of Iranian condensate, an ultra-light crude oil that is used in its large refining and chemical industry.


West Texas Light (WTL) is seen as a potential substitute for Iranian condensate because, when refined, WTL yields a large volume of the refined product naphtha, which can be used to produce petrochemicals. Most WTL is produced in the western part of the Permian Basin in Texas.


Anadarko spokesman John Christiansen confirmed the company is exporting WTL, and said they “anticipate those volumes will continue to grow in the future”, although he did not confirm whether South Korea was testing this grade.


South Korea’s top refiner SK Energy, and the country’s smallest refiner Hyundai Oilbank are studying the crude’s assay and testing samples, the sources said.


“The crude’s API seems to be 48 degrees so in a way it’s possible (to replace Iranian condensate) but again we need to check the oil’s quality,” one of the sources said.


The source is referring to the so-called API gravity of the crude, which measures its density and indicates the type of fuels an oil yields when refined.


A spokeswoman from SK Innovation, owner of SK Energy, and a spokesman from Hyundai Oilbank declined to comment. — Reuters


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