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Saudi Aramco to meet Asia demand for August crude in full: sources
July 11, 2017 / 10:48 AM / 2 months ago

Saudi Aramco to meet Asia demand for August crude in full: sources

An oil tank is seen at the Saudi Aramco headquarters during a media tour at Damam city November 11, 2007. REUTERS/ Ali Jarekji/Files

SINGAPORE/NEW DELHI (Reuters) - Saudi Aramco will meet the full August crude oil requirements of its customers in India and southeast Asia as well as four of its North Asian buyers, several sources with knowledge of the matter said on Tuesday.

This shows how Saudi Arabia, the world’s biggest oil exporter, aims to retain market share in Asia, the region with the world’s strongest demand growth.

Saudi Arabia has been cutting exports to Europe and the United States to comply with a production cut deal by the Organization of the Petroleum Exporting Countries and some non-OPEC countries such as Russia.

For August, “there is no (supply) cut” even for heavier grades such as Arab Medium and Heavy crude to south Asian customers, one of the sources said.

At least one of the North Asian buyers will also receive full supply of Arab Heavy crude that it has requested.

A Saudi Aramco employee sits in the company stand at the Middle East Petrotech 2016, an exhibition and conference for the refining and petrochemical industries, in Manama, Bahrain, September 27, 2016. REUTERS/Hamad I Mohammed/Files

This marks a change from supply cuts to these buyers in the first half this year as Saudi Aramco cut output of cheaper heavy crude to meet its OPEC quota.

Saudi Aramco is selling Arab Heavy crude in August at the narrowest discount in more than three years.

The OPEC cuts drove up prices of Middle East heavy-sour crude, or grades with a high sulphur content, pushing Asian refiners to seek substitutes from Russia, Africa and the United States.

Last week, India bought its first ever U.S. crude and its refiners plan to buy more.

Saudi continues to supply slightly more light oil to Japan, one of the sources said.

Saudi Arabia has increased its market share in Japan, its biggest Asian market, in the first half this year. Japan’s imports of Saudi crude between January and June reached 1.3 million barrels per day, 7.7 percent up on a year ago.

Reporting by Florence Tan in SINGAPORE, Nidhi Verma in NEW DELHI and Osamu Tsukimori in TOKYO; Editing by Susan Fenton and Jane Merriman

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