Kuwait crude exports to drop as much as 18 in H2 2023
Chinese refiners most exposed to drop in sour crude supply
Sour crude discount to sweet narrows sharply

SINGAPORE, Aug 18 Reuters Asian refiners are on the hunt for crude oil to replace Kuwaiti supply as the OPEC producer cuts exports by nearly a fifth to feed its huge new refinery, which is driving up prices for other sour crudes and likely to squeeze profit margins.

Lower Kuwaiti exports follow cuts from OPEC kingpin Saudi Arabia that have pushed Brent prices close to 90 a barrel and left little wriggle room for Asia39;s refiners, reliant on the Middle East for more than twothirds of crude imports.

Chinese refiners, which have invested heavily in new plants designed to process sour oil, are especially exposed.

Discounted oil from Russia has eased some of the pain, replacing some Kuwaiti supply, largely to China and India.

But most of Kuwait39;s customers will have to pay up for similar quality oil from other suppliers such as Saudi Arabia, Iraq and the United Arab Emirates or buy more expensive sweet grades from other regions.

Saudi Arabia and the UAE are the top contenders for filling the supply gap in the Middle East due to their production and export of medium sour barrels, said Janiv Shah, an analyst at consultancy Rystad Energy.

It is improbable that they will be able to entirely meet the demand.

Sustained output cuts from OPEC producers and their allies and new refining capacity designed to process…