Asian refiners tweak their Qatar oil loadings to side-step Gulf spat

By Florence Tan and Jane Chung

SINGAPORE/SEOUL (Reuters) - Asia's oil refiners are adjusting their shipping arrangements for loading Qatari crude to side-step the diplomatic spat between Doha and other Middle East nations, including top Gulf oil producers Saudi Arabia and the United Arab Emirates.

Buyers are chartering extra ships, loading oil from Saudi Arabia and the UAE before Qatar, or lifting a combination of Qatari and Iranian cargoes so they adhere to port and cargo restrictions enacted by the UAE and Saudi Arabia, according to industry sources and shipping data on Thomson Reuters Eikon.

The measures illustrate the steps that Asian refiners and traders are taking to avoid upsetting both sides of the dispute and keep oil flowing. However, the manoeuvres are adding time and costs to their trades.

"Shipping costs have increased because vessels can't stop at Saudi ports after lifting Qatari crude and I believe many other Northeast Asian buyers are worried about high logistics costs," a source at a South Korean refiner said.

Saudi Arabia and the UAE, along with Bahrain and Egypt, have imposed sanctions on Qatar accusing it of backing terrorism, a charge Doha denies.

The UAE and Saudi Arabia in early June announced bans on vessels calling on their ports after visiting or going to Qatar or carrying Qatari oil as part of the sanctions. This disrupted the common industry practice of co-loading oil from different countries onto the same tanker to save logistical costs.

Buyers can load up to 2 million barrels, equal to four standard 500,000-barrel Middle East oil cargoes, on a very large crude carrier or 1 million barrels onto a Suezmax tanker.

The status and enforcement of those bans remains uncertain. Three Asian refinery sources said that Abu Dhabi National Oil Company (ADNOC) has assured them they can call at Qatari ports after loading in the UAE. A fourth source with knowledge of the matter confirmed the discussions; however, official statements from the UAE port authorities still ban Qatari-linked tankers.

Abhinav Chandra, a Dubai-based commercial manager at Sharaf Shipping Agency, said he has yet to see ships carrying Qatari oil calling at either Saudi or Emirati ports.

"Separating Qatari and ADNOC loadings is the best option but it comes at a cost," a trader with a southeast Asian refiner said.

Ship charterers who loaded Qatari oil in late June to early July were left with so-called dead freight, an industry term referring to unutilised vessel space, shipping data on Eikon showed.

Producing only 600,000 barrels per day, Qatar is among the smallest Middle East oil producers but more than half of its exports go to Japan, Singapore and South Korea.

Unlike other Middle East grades, Qatar crude is freely traded in the spot market with no restrictions. Oil pricing agency S&P Global Platts uses Al-Shaheen, the country's biggest production stream, as a delivery crude in its pricing process for Middle East benchmark Dubai.

Platts had halted Al-Shaheen deliveries at the start of the diplomatic row but reinstated the grade starting this month.

While the Gulf conflict may remain in a protracted stalemate, it is unlikely to disrupt Qatar's oil and gas exports, Torbjorn Soltvedt, head of Middle East and North Africa risk analysis at Verisk Maplecroft told the Reuters Global Oil Forum.

"So far it looks like there is restraint on both sides on this issue," he said.

(Reporting by Florence Tan in SINGAPORE and Jane Chung in SEOUL; Additional reporting by Osamu Tsukimori in TOKYO; Editing by Christian Schmollinger)