Saudis cut oil supply to some buyers after OPEC + restrictions promised by Bloomberg


Saudis cut oil supply to some buyers after OPEC + restrictions

(Bloomberg) – Saudi Arabia slashed supplies to at least nine refineries in Asia and Europe after the kingdom volunteered to cut its production by 1 million barrels a day during February and March. Aramco (SE 🙂 will supply less crude as part of long-term contracts next month, giving some Asian processors up to 20% -30% less than they had sought, according to company officials who received the notices but asked not to be identified as the information is private. A European refinery that normally buys small volumes from Saudi Arabia will not receive any shipments for February. Supply cuts focused on heavier grades, such as Arab Medium and Arab Heavy, officials said. State-owned Aramco declined to comment when contacted on the matter. Saudi Arabia’s decision to sell less oil comes amid a general decline in demand for crude in Asia due to the peak maintenance season for refineries from March to April. Furthermore, the resurgence of Covid-19 infections in Asia and Europe, and the declaration of a state of emergency in parts of Japan and Malaysia are also reducing fuel consumption and keeping refinery operating rates at low levels. . See also: Oil refiners cut Saudi production despite declining demand Five other Asian processors sought less crude for February and received the volumes they requested, the official said. Aramco raised its official sales prices for all sales to Asia and the United States last week after its surprise announcement to implement deep cuts for the month. Across Asia, refiners eagerly awaited Aramco’s release of alleged February allocations amid expectations of tighter supply. The size of the restrictions promised by Saudi Arabia was larger than the market had anticipated, adding to Abu Dhabi’s move to cut Asian maturity volumes for key grades by 20% next month. Despite lower demand for crude due to maintenance shutdowns in Asia and tight margins, regional processors that were hit by supply cuts may look to fast point loads (some shipments are still available from last month) to make up for the deficit. Other alternatives include Russian short-haul barrels like ESPO and Sokol for March cargo that can reach North Asia in less than a week. © 2021 Bloomberg LP

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