Saudi Aramco has told at least four refinery customers in North Asia they will receive full contract volumes of crude oil in December, several sources with knowledge of the matter said on Nov. 10.
The producer is maintaining a steady supply to Asia despite the decision by OPEC and allies including Russia, known as OPEC+, to lower the group’s output target by 2 million bbl/d starting this month.
“People are scratching their heads to figure out when will the output cut be materialized, as the market has not felt a tightened supply,” said one of the sources, a Singapore-based trader.
Saudi Arabia’s Energy Minister Abdulaziz bin Salman said when the cuts were announced in October that the actual supply cut would be about 1 million to 1.1 million bbl/d.
The sources said Saudi Arabia’s latest official selling prices (OSPs) to Asian buyers have sent a signal that it will not trim the allocation for the month.
Saudi Aramco lowered the December OSP for its flagship Arab Light crude it sells to Asia by 40 cents a barrel from the prior month amid signs of weaker demand in the region.
But the company raised the OSPs to European customers and kept the prices for clients in the U.S. unchanged.
“[The OSP adjustment] could indicate that Saudi wants to maintain its market share in Asia in December when the price cap on Russian crude kicks in,” said another source.
The United States, the EU and other G7 nations are set to impose a price cap on Russian oil on Dec. 5 in response to Russia's invasion of Ukraine.
China, the biggest buyer of Saudi crude oil, has increased purchases from Russia to take advantage of discounts for Russian oil as western countries scaled back trade with Moscow.
Saudi Aramco did not immediately respond to Reuters’ request for comment.
Recommended Reading
Blackstone in Talks to Buy US Pipeline Stakes from EQT for $3.5B, Sources Say
2024-10-28 - If the talks are successful, the deal would help natural gas producer EQT slash the debt pile it accumulated from its acquisition of pipeline operator Equitrans Midstream earlier this year.
APA Divests $950 Million in Non-core Permian Basin Assets
2024-09-13 - APA Corp. said it would sell assets in the Central Basin Platform, Texas and New Mexico Shelf and Northwest Shelf that average 21,000 boe/d, 57% oil.
Vivakor to Acquire Endeavor Crude Transport Cos. for $120MM
2024-09-25 - Vivakor said it is buying Endeavor Crude and related companies, which have a series of long-term strategic partnerships with customers in the Permian Basin, Eagle Ford Shale and the STACK play.
Coterra to Acquire Permian Assets from Franklin, Avant for $3.95B
2024-11-13 - Coterra made its long-awaited move to grow dramatically in the Permian, moving on large portions in New Mexico’s Delaware Basin.
Diamondback Closes $26B Endeavor Deal, Forming Last Permian ‘Sandbox’
2024-09-13 - Diamondback Energy’s merger with Endeavor Energy Resources forms a company with pro forma production of 468,000 bbl/d (816,000 boe/d) on total Permian acreage of about 838,000 net acres.
Comments
Add new comment
This conversation is moderated according to Hart Energy community rules. Please read the rules before joining the discussion. If you’re experiencing any technical problems, please contact our customer care team.