20-02-2017

Asian refiners receive full Saudi crude allocations for March

oil

Saudi Aramco’s major crude oil buyers in Northeast Asia and Southeast Asia are receiving full term allocations for Saudi crude oil loading in March, according to traders contacted by S&P Global Platts this week.

March allocations for Chinese buyers were met and traders at China’s top trading companies said they were not aware of any requirements that were not met.

Traders at several Japanese end-users also said their March requirements were met and were not aware of cuts to any company in the country.

The same was said by the biggest crude oil importers in South Korea and Taiwan.

Traders at oil companies in Thailand, Malaysia, the Philippines and Indonesia also said their requirements for March were fully met.

In India, a trader at a private refiner said he was not aware of any cuts to the country’s buyers. State-controlled companies did not respond to Platts queries.

Some buyers may be receiving lower volumes in March simply because their demand has fallen in part due to refinery turnarounds, according to market participants.

Higher-than-expected official selling price differentials set by Aramco for its Asia-bound crude oil grades loading in March, especially on the lighter grades, could have also spurred some buyers to look for alternatives, traders said.

This made it even more unlikely for Aramco to not meet their March requirements.

A recent Platts survey showed Saudi Arabia’s crude oil production in January had fallen to 9.98 million b/d.

That is below its allocation of 10.06 million b/d under the OPEC and non-OPEC agreement to cut production, as crude oil exports declined by more than 500,000 b/d in the month, Platts trade flow software cFlow showed.

It is also the first month Saudi Arabia’s production has been below 10 million b/d since February 2015, according to the survey archives.

Full allocations to Asian buyers seemed to be at Europe and US buyers’ expense when total production is lower, with unconfirmed cuts to western customers heard.

Source: Platts 

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