Kuwait Petroleum Offers Ship-To-Ship Transfers Outside Strait Of Hormuz To Protect Supply Chains

Kuwait Petroleum Corporation (KPC) is providing its buyers with the option of ship-to-ship transfers beyond the risky waters of the Strait of Hormuz.

Emad A. M. Al-Kandari, deputy managing director of International Marketing at the company, spoke at the APPEC Industry Conference, where he announced this move to ensure the safe delivery of cargo to the buyers.

KPC has not specified which oil products were being offered for these transfers; however, a few media outlets suggest the company agreed to handle delivery of naphtha to many clients between Aug and Sept.

The company routes ships through the strategic waterway whenever security conditions permit, but offering STS transfers beyond the war-torn maritime chokepoint seems like a viable way to protect the oil shipments.

Market sources note that the delivered shipments brought additional expenses of about 60 USD a ton above the standard Japanese price benchmarks.

This also marks a major change in strategy, because KPC usually sold naphtha directly at its home ports, where buyers managed all shipping risks on their own before the war between the United States and Iran began.

The company has suffered a major blow due to the ongoing conflict. According to reports, Kuwait used to export 200,0000 barrels of naphtha per day in January and February before the war began; however, those numbers came down to 0 in April.

KPC began the cargo offers in June for the first time since the war began, and over the past two months, export volumes have stabilised at 50% of what they were before the war.

Kuwait Petroleum Corporation is based in the city of Kuwait and is a state-owned company which generates 7% of the world’s oil through its activities, including exploration, production, transportation, refining and marketing.