New gasoline-rich crude from Azerbaijan and Russia is blunting the impact of oil attacks in Nigeria this year but the relief will be shortlived as the world's available oil becomes ever more sulphurous.

Large projects this year should add around 1.36 million barrels per day (bpd) of light, sweet crude, more than enough to meet total global demand growth of 1.24 million bpd, according to a Reuters poll.

But militant attacks and pipeline leaks in Nigeria have wiped out over half a million bpd of light sweet crude favored by refiners for making transport fuels. In July, Nigerian outages were even higher at over 700,000 bpd.

The increased light, sweet supply would have provided some breathing space, said Paul Tossetti, director of market analysis at Washington-based PFC Energy. Certainly in terms of the spread between sweet and sour oil.

Refiners can produce more of the much needed gasoline, diesel and jet fuel from lighter, sweeter crudes. Heavier, more sour oil requires more sophisticated refineries for processing.

Most complex refineries are already running flat out, taking advantage of better profit margins for upgrading poor-quality crude.

Spare plant capacity is among simple refiners that need to run light sweet crude. If they can't get that crude cheaply, they cut runs. European refiner Preem did just that earlier in August.

Even with the outages in Nigeria, a batch of light, sweet crude projects should help refiners by the end of the year.

With more light sweet crude available to the market, refiners should face fewer constraints, although strong economic growth will continue to keep the market for transport fuels tight, the Center for Global Energy Studies said in a report.

The new crude should temporarily halt the trend for global oil supplies to deteriorate into heavier, sour crude.

This year could be relatively light and relatively sweet in terms of supply increments, said David Fyfe, at the International Energy Agency.

Nobody doubts in the longer term that the trend is for heavier and more sour crude, but there will be some bumps in the road.

Producers are struggling to bring on enough sweet oil to meet rising refinery demand while also compensating for falling sweet crude output from mature regions such as the North Sea.

AZERI

The recently-started $4 billion BP-led Baku-Ceyhan pipeline is delivering nearly 300,000 barrels per day of light, sweet oil from Azerbaijan to global markets in August.

The light Azeri crude is of the type much needed by simple Mediterranean refineries as they try to address a regional diesel shortage. U.S. refiners were also expected to take the crude as Azeri output increases.

Azeri crude is high quality and good for fuels, an attractive product not only for Europe but also for the U.S, said Frank Verrastro, director of the energy program at the Center for Strategic and International Studies in Washington.

Refiners desperate for sweet crude should get another fillip from Russia later in the year. Exxon Mobil's Sakhalin 1 project is expected to begin pumping gasoline-rich crude late in the third quarter or early in the fourth.

It is the biggest new source of Pacific basin crude in over a decade, and will eventually pump 250,000 bpd. Its proximity to Japan means the world's third largest energy consumer will likely be the biggest buyer.

New projects in Nigeria have also partially compensated for its own lost output.

The new supplies encouraged the world's largest exporter Saudi Arabia to take around 400,000 bpd of its medium sour grades off the market in the second quarter, analysts said. It has yet to restore that output.

Saudi Arabia was being entirely reasonable in discretely cutting back as the other crudes come on stream, said Deborah White of SG CIB Commodities.

Crude supplies are not so tight. Saudi Arabia's spare capacity is in medium and heavy crude which doesn't match the needs of refinery capacity available.

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