Top oil buyers go on light crude diet to satisfy diesel craving

Seoul

CAPTAIN Tsitrelis Ioannis and the 26-strong crew of the Malibu arrived at Ulsan in early August after sailing almost 9,000 nautical miles to deliver a million barrels of Kazakh CPC crude from the Black Sea to South Korea, one of the key buyers in the world's biggest oil market.

Another cargo of light oil, which is less sulfurous than heavier grades, is set to arrive in a couple of months at Ulsan from even farther away - the US - to be processed by SK Innovation Co, South Korea's top refiner. The two shipments are part of a stream of similar varieties flowing to Asia as companies look to process the kind of crude that yields more diesel to capitalise on surging demand for the fuel.

Last month, profit margins from making diesel in Asia touched the highest since November 2015, contrary to expectations for a typical seasonal drop in demand during this time of the year due to monsoon rains. The unusual gains have been driven by higher imports of cleaner diesel by India after the government imposed new quality standards and as China uses more to feed the expansion of its construction and industrial se…