Daily Management Review

Saudi Arabia is offering extra oil supply to Asian buyers


07/16/2018


Saudi Arabia is offering extra volumes of oil in addition to its contractual supplies, to some buyers in Asia. This is reported by Bloomberg referring to sources familiar with the situation.



pixabay
pixabay
The Middle Eastern Kingdom, the de facto leader of OPEC, is planning a record oil production after easing restrictions on production within the OPEC + deal.

Saudi Arabian Oil Co., State Oil Company of Saudi Arabia, offered additional cargo of Arab Extra Light oil for delivery in August to at least two customers in Asia, the agency's interlocutors confirm. The batch was offered in addition to the contractual monthly supply from Saudi Aramco.

One of the Asian processors who received the offer to purchase Arab Extra Light, acceptedthe additional supplies, one source said.

US President Donald Trump's administration, worried about the impact of rising gasoline prices on midterm elections in November, has aggressively lobbied for an increase in OPEC oil production.

The import of the US oil from Saudi Arabia jumped 51% in July.

The Kingdom is reportedly seeking to increase production this month to an unprecedented 10.8 million barrels per day.

The level of Saudi Arabia’s fulfillment of obligations to limit production in June fell to 26%, Bloomberg calculations showed on the basis of data from secondary sources of OPEC. This is the first time that the kingdom has not fulfilled the terms of the agreement, since it began operating in January 2017.

Meanwhile, some Saudi clients such as India warn that higher prices will restrain demand. Chinese Unipec, the trade arm of the country's largest refiner, cut purchases from the kingdom, citing high prices.

Earlier this month, Saudi Aramco lowered prices for the August deliveries of most types of oil for Asia and Europe and all types of oil for US buyers.

source: bloomberg.com






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