(C) Bloomberg. An employee walks along transport pipes leading to oil storage tanks at the Juaymah tank farm at Saudi Aramco’s Ras Tanura oil refinery and oil terminal in Ras Tanura, Saudi Arabia, on Monday, Oct. 1, 2018. Saudi Aramco aims to become a global refiner and chemical maker, seeking to profit from parts of the oil industry where demand is growing the fastest while also underpinning the kingdom’s economic diversification. Photographer: Simon Dawson/Bloomberg
(Bloomberg) — Saudi Arabia will supply all the crude oil that was requested by India’s state-owned refiners and at least four other Asian customers next month as the linchpin producer starts to ramp up output.
The kingdom will deliver in full what most of the refiners asked for in May-loading cargoes, while one of the customers got its volume to the U.S. curtailed, according to officials notified by Saudi Aramco (SE:2222). Two other customers received some cuts to overall volumes. An email sent to the producer’s press relations office wasn’t immediately answered outside regular office hours.
Led by Saudi Arabia, the Organization of Petroleum Exporting Countries and its allies will restore from May some of the supply that was cut back as the pandemic ravaged demand. Following that decision, the Saudis hiked pricing for the key Asian market in expectation that consumption will rebound further. The overall plan, which includes Riyadh’s return of a unilateral supply cut, was defended last week by Energy Minister Prince Abdulaziz bin Salman.
India’s current round of allocations attracted particular scrutiny after its four state-owned refiners including Indian Oil Corp. had submitted lower nominations, or requests for supply. Overall, the country will take about a single Aframax-size vessel– typically about 600,000 barrels — less than granted in the prior month’s allocations, people familiar with the matter said.
With tension between India and Saudi Arabia over Riyadh’s oil policy, its state-owned processors had asked to reduce next month’s volumes by about one-third of their monthly average. However, India’s refiners are in peak maintenance season and the nation is battling a resurgence in Covid-19, potentially indicating the amount needed for the month is below average.
Meanwhile, the volume of Arab Light crude was reduced for two other buyers in the region and a third customer got its supply for Asia fulfilled but was notified of some cuts to its U.S. operations.
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Saudis Meet Oil-Supply Requests From Most in Asia Before Ramp-Up
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