Iran's condensate exports in July are expected to fall to the lowest in five months, as major buyer South Korea scales back purchases of the ultra-light oil, trade sources said on Thursday.
Robust demand for condensate, particularly from South Korea, helped drive a recovery of Iranian oil exports to a 4-1/2-year high in June, although the volume is expected to dip in July, Reuters reported.
Loadings of Iranian condensate in June rose to about 408,000 barrels per day, the highest volume since sanctions on Iranian oil exports were lifted in January.
For July, Iranian condensate exports are expected to fall by 38% to about 252,000 barrels per day, the sources said citing loading data, as Asian refiners replace the ultra-light oil with cheaper naphtha.
The volume destined for South Korea in July is expected to fall by nearly two-thirds to 84,000 bpd from a record high in the previous month, as key buyer SK Energy switched to process cheaper naphtha, they said.
Condensate is processed at splitters to produce mainly naphtha, a petrochemical feedstock.
Still, the launch of new and existing splitters in Asia and the Middle East is expected to drive demand for Iranian condensate later in third quarter.
"There could be a rebound (in condensate prices) in September because naphtha cracks are showing some signs of a rebound," a trader with a North Asian firm said.
South Korea's Hyundai Chemical will also need to buy more condensate from September onwards for its new splitter, which could become operational in October, he said.
The petrochemical joint venture between Hyundai Oilbank Company and Lotte Chemical has already purchased Qatari condensate and is in talks with the National Iranian Oil Company for long-term supplies.
