Middle East Crude-Benchmarks steady; S. Korea reduces Iran imports

SINGAPORE: Middle East crude benchmarks were little changed on Tuesday as traders awaited official selling prices from Saudi Aramco.

South Korea's oil imports from Iran could fall to the lowest in three years in September as buyers hold back on booking cargoes, hoping for a US waiver from sanctions on Iran, several sources with knowledge of the matter said.

Petronas and India's MRPL have bought new crude for their refineries as they seek to increase the number of grades that they could use ahead of possible supply disruption.

OSP PREVIEW: Saudi Arabia is expected to cut the price for flagship Arab Light crude from the highest in four years in August after refining margins in Asia dropped to a two-year low, trade sources said on Monday.

The official selling price (OSP) for Arab Light crude could fall by 20-40 cents a barrel next month, a Reuters survey of six Asian refiners and traders showed.

"Arab Super Light, Arab Extra Light and Arab Light all need price adjustments to stay competitive with other light grades," said a trader with a North Asian firm, adding that there were ample supplies of such oil in the market.

On the other hand, a recovery in fuel oil margins and robust summer demand will support Arab Medium and Arab Heavy OSPs, leading to steady or higher prices in August, five of the six survey respondents said.

Separately, ADNOC and Qatar Petroleum are also expected to reduce their OSPs after spot cargoes traded at discounts of 20 cents or more last month, traders said.

The OSP premiums for Murban and Das could fall by 20 cents, while that for Upper Zakum could drop more than 10 cents, they said.

The price cut for Qatar Marine is expected to be deeper than that of Upper Zakum, one trader said.

IRAQ: India's MRPL has bought its first cargo of Iraqi Basra Heavy crude from Shell via a tender, two sources said.

MRPL bought the cargo at $1.20 below Dubai quotes on a cost and freight basis.

The refiner is likely to blend the 1 million barrels Basra Heavy crude, which will be delivered in September, with lighter grades so it can be processed at its refinery, one of the sources said.

ARBITRAGE: Petronas has bought its first ever US oil cargo of 1 million barrels of Mars crude, expected to arrive at its Malacca refinery in September, two sources said.

One of the two crude distillation units at the Malacca refinery will process the US sour crude that will replace oil from the Middle East, one of the sources said.

WINDOW: Cash Dubai's premium to swaps edged up 2 cents to 86 cents a barrel following a flurry of deals on window.