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Extra Heavy Crude to Help Expand Market Share

Extra Heavy Crude to Help Expand Market ShareExtra Heavy Crude to Help Expand Market Share

Iran is hoping that its extra heavy crude, one of its lower quality grades, will propel its quest to retake the market it conceded to rival producers during the sanctions, a report published by the state-run National Iranian Oil Company shows.

Iran’s extra heavy crude cannot compete in Russian, Saudi, Emirati and Kuwaiti markets, the report says, but the country can boost shipments of its heavy grades to China, India, Japan and some European countries due to their processing facilities that suit heavy crudes, Shana reported.

The processing of heavy crudes, which are lower-quality grades, is generally costlier and requires more sophisticated refineries.

In addition, light crude is normally more expensive than heavy blends because it produces a higher percentage of gasoline and diesel fuel when converted into products in refineries. Heavy crude oil is closely related to natural bitumen from oil reserves.

According to reports, most of Iran’s heavy oil supplies will be sourced from the Yadavaran, South Azadegan and North Azadegan oilfields in the West Karoun region near the Iraqi border.

Iran’s main grades for exports are marketed as Iran Heavy. The country also produces condensates—a type of light crude extracted from its natural gas fields in the Persian Gulf.

Energy portal Oil Price reported in February that export of Iran’s heavy grades was facing a delay to allow customers more time to test the crude in their refineries.

Iran has firmly ramped up crude production and exports since sanctions against its nuclear program were lifted on January 16. The country is planning to reach its pre-sanctions output level of 4 million barrels a day and raise output to 4.7 million barrels in the long run.

 

Financialtribune.com