Calendar An icon of a desk calendar. Cancel An icon of a circle with a diagonal line across. Caret An icon of a block arrow pointing to the right. Email An icon of a paper envelope. Facebook An icon of the Facebook "f" mark. Google An icon of the Google "G" mark. Linked In An icon of the Linked In "in" mark. Logout An icon representing logout. Profile An icon that resembles human head and shoulders. Telephone An icon of a traditional telephone receiver. Tick An icon of a tick mark. Is Public An icon of a human eye and eyelashes. Is Not Public An icon of a human eye and eyelashes with a diagonal line through it. Pause Icon A two-lined pause icon for stopping interactions. Quote Mark A opening quote mark. Quote Mark A closing quote mark. Arrow An icon of an arrow. Folder An icon of a paper folder. Breaking An icon of an exclamation mark on a circular background. Camera An icon of a digital camera. Caret An icon of a caret arrow. Clock An icon of a clock face. Close An icon of the an X shape. Close Icon An icon used to represent where to interact to collapse or dismiss a component Comment An icon of a speech bubble. Comments An icon of a speech bubble, denoting user comments. Ellipsis An icon of 3 horizontal dots. Envelope An icon of a paper envelope. Facebook An icon of a facebook f logo. Camera An icon of a digital camera. Home An icon of a house. Instagram An icon of the Instagram logo. LinkedIn An icon of the LinkedIn logo. Magnifying Glass An icon of a magnifying glass. Search Icon A magnifying glass icon that is used to represent the function of searching. Menu An icon of 3 horizontal lines. Hamburger Menu Icon An icon used to represent a collapsed menu. Next An icon of an arrow pointing to the right. Notice An explanation mark centred inside a circle. Previous An icon of an arrow pointing to the left. Rating An icon of a star. Tag An icon of a tag. Twitter An icon of the Twitter logo. Video Camera An icon of a video camera shape. Speech Bubble Icon A icon displaying a speech bubble WhatsApp An icon of the WhatsApp logo. Information An icon of an information logo. Plus A mathematical 'plus' symbol. Duration An icon indicating Time. Success Tick An icon of a green tick. Success Tick Timeout An icon of a greyed out success tick. Loading Spinner An icon of a loading spinner.

Saudi Aramco to give extra supply to ‘oil-starved’ Asian buyers

Man in suit waves two fingers
Amin Nasser, chief executive officer of Saudi Arabian Oil Co. (Aramco), gestures as he speaks during a Bloomberg Television interview on day two of the World Economic Forum (WEF) in Davos, Switzerland, on Wednesday, Jan. 24, 2018. Photographer: Simon Dawson/Bloomberg

Saudi Arabia is set to supply more crude to oil-starved Asian refiners, and extract a heavy price for it.

State-run producer Saudi Aramco will sell additional cargoes to customers in the world’s biggest oil-consuming region for June loading, according to people with knowledge of the matter.

The shipments will be on top of those scheduled under long-term crude contracts, they said, asking not to be identified because the information is confidential.

While the extra supplies will alleviate a squeeze driven by U.S. sanctions on Iran and Venezuela as well as unexpected disruptions from Russia to Nigeria, the refiners face a costly bill.

Aramco raised its official selling price for June cargoes of its flagship Arab Light crude to the biggest premium versus Middle East benchmark prices in 11 months.

The cost of the Arab Medium variety was set at the highest since December 2013, while Arab Heavy was increased to the most in over six years.

The higher costs aren’t expected to deter Asian buyers, who had earlier this month asked OPEC’s biggest producer for additional supplies even before the kingdom set its pricing for June cargoes.

The scramble for shipments follows the May 2 expiry of U.S. sanctions waivers for buyers of Iranian oil, which the White House decided not to renew as part of its campaign to squeeze Tehran’s finances.

Global benchmark Brent crude rose 0.5 percent to $70.26 a barrel on the London-based ICE Futures Europe exchange at 9:46 a.m. in Singapore on Wednesday, after closing 1.9 percent lower in the previous session. Prices slipped 1.8 percent last week, snapping a five-week rally.

Supply Uncertainty

Refiners in India, where oil demand is growing at the fastest pace in the world, are set to receive as much as 200,000 barrels a day of incremental supplies, the people said. Some refiners in China, the top crude importer, and Japan will also receive additional shipments, they said.

Aramco was willing to supply more volumes to meet the requests of a major Chinese refiner, said a person familiar with the company’s procurement, although details on the type and quality of oil on offer remained unclear. That’s before the official announcement of the kingdom’s monthly allocations for June, which is due later this week.

The press office for Aramco, known officially as Saudi Arabian Oil Co., couldn’t immediately comment.

Prices had seesawed previously on uncertainty over how Saudi Arabia would respond to the tighter U.S. sanctions, as well as other unexpected supply disruptions across the globe. Energy Minister Khalid Al-Falih has said the kingdom will keep the market balanced, but also signaled that the Organization of Petroleum Exporting Countries and its allies including Russia could extend output curbs until the end of this year.

Recommended for you

More from Energy Voice

Latest Posts