KPC Concludes First Naphtha Delivery Deal at Destination Port

Insiders said today that the Kuwait Petroleum Corporation (KPC) signed its first-ever time charter agreement for naphtha on a delivered-at-port basis, amid disruptions to load-on-tender operations at the Strait of Hormuz due to the ongoing war in the Gulf.

* The contract for full-range naphtha shipments, scheduled for delivery between December 2026 and November 2027, was concluded at a premium of approximately $75 per ton over Japan Crude Cocktail (JCC) prices.

* The state-owned refining company had previously sold its products on a load-on-tender basis.

* This time charter aligns with the company’s spot sales offers since the outbreak of war in the Middle East, all of which were delivered on a delivered-at-port basis.

The price of a barrel of Kuwaiti crude oil fell by 86 cents to $111.55 in Wednesday trading, compared to $112.41 in Tuesday trading, according to the price announced by KPC.

In global markets, oil prices fell this morning, erasing some of yesterday’s gains, as hopes for talks eased renewed concerns about Middle East supply disruptions stemming from the escalating conflict in the region.

JPMorgan analysts said in a note last night, “No other confirmed attacks on Russian refining infrastructure have been recorded since the strike on the Ryazan refinery on October 15... This calm allowed Russian refineries to increase processing by 350,000 barrels per day last week to reach 4 million barrels per day.”

They added, “The increase in operations should enable Russia to raise crude oil production by a similar amount, offsetting part of the recent decline and pushing production to 8.4 million barrels per day, the lowest level since 2003... (but) increased crude oil production does not necessarily mean increased exports.”

The U.S. Energy Information Administration (EIA) said on Wednesday that energy companies drew 1.9 million barrels of crude oil from stocks during the week ending on the 23rd, compared to analysts’ expectations of a 15,000-barrel increase in stocks in a Reuters survey.

China’s Sinopec Refining and Marketing Company announced today that its net profit rose 57.2 percent year-on-year in the third quarter, compared to the same period last year, after improved refining margins and higher crude oil prices offset the decline in fuel demand.

The world’s largest refiner by processing capacity said its net income reached 13.36 billion yuan ($2.01 billion) from July to September, while net profit for the first nine months totaled 38.99 billion yuan, up 30 percent.

Sinopec processed 167.37 million tons of crude during the first nine months of the year, equivalent to approximately 4.48 million barrels per day, a 10.2 percent decrease compared to the previous year.

Diesel production led the decline, falling 9.2 percent compared to the same period last year, while gasoline production dropped 6.4 percent, and jet fuel production fell 5.9 percent.

Refined fuel sales fell 11.4 percent during this period to 151.91 million tons. Domestic sales reached 118.90 million tons, a 10.7 percent decrease.

Despite the drop in sales, the refining sector recorded earnings before interest and taxes (EBIT) of 30.10 billion yuan in the first nine months, compared to 7 billion yuan in the previous year.

Ethylene production fell by 19 percent, and the company’s chemicals sector recorded a loss of 1.69 billion yuan before interest and taxes during the same period, representing a decline compared to the previous year’s loss of 8.22 billion yuan. Sinopec said that China’s consumption of refined fuels dropped 8.6 percent year-on-year in the first nine months, as rising oil prices and a faster shift toward alternative energy sources led to weaker demand.