Swiss trading house Vitol will supply South Korean refiner Hyundai Oilbank with straight run fuel oil for six months starting from July-August, traders said.

Hyundai Oilbank’s short-term contract, which follows on the heels of regular monthly imports of straight run fuel oil (SRFO) by SK Energy since late 2013, bolsters the trend of export-oriented refiners channelling more SRFO to their feedstock pool. Demand for SRFO has grown in past months as profits from refining crude oil narrowed due to ample supplies of high-value products such as diesel and jet fuel, pressuring prices.

Hyundai Oilbank will receive 60,000-65,000 tonnes of SRFO at a premium of around $60 a tonne to Singapore 180-cst quotes on a cost-and-freight basis, traders said. The South Korean refiner operates two refineries in Daesan with a combined crude processing capacity of 390,000 barrels per day (bpd).

Trade sources said the cargoes will be from Fujairah, United Arab Emirates.

Vitol owns an 82,000-bpd refinery and more than one million cubic meters of storage in Fujairah. Vitol declined comment and Hyundai Oilbank could not be reached for comment.

SRFO is the first cut of product obtained from processing crude oil in the distillation unit, and may be further refined to produce other products including gasoline, diesel and jet fuel.