Singapore/London: Saudi Aramco’s trading arm is looking for oil products for prompt delivery following Saturday’s attacks on Saudi oil facilities, three trade sources said on Monday.
Saudi Arabia is set to become a significant buyer of refined products after the attacks forced it to shut down more than half of its crude oil output and some of its gas, consultancy Energy Aspects said in a note on Sunday.
The attacks have possibly curtailed as much as 1 million barrels per day (bpd) of Aramco’s refining capacity, Energy Aspects said, although this could not be confirmed and it was not clear to which Saudi Aramco refineries it was referring.
Aramco Trading Company (ATC), the trading arm of Saudi Aramco, is making enquiries to buy diesel for prompt delivery, two of the trade sources said.
Saudi Arabia is typically a net exporter of diesel.
“They are looking (for oil products) since they are trimming runs at some of the refineries,” one source said, declining to be named as he was not authorised to speak to media.
He said the total volumes sought by Saudi Arabia were not immediately clear, but that the prompt derivatives market was trading higher on Monday.
ATC is seeking 10 parts-per-million (ppm) sulphur diesel through private discussions, asking for “anything prompt”, a second trader said.
Brent crude futures, the international benchmark, rose by as much as 19.5% to $71.95 per barrel during early Asian trading hours.
A third trading source said that Aramco Trading may have bought two ultra low sulphur diesel cargoes, although this could not be confirmed immediately and details were not available.
“The issue for Aramco is how they can meet their huge commitments to deliver products in September and October,” another diesel trader said. The trader, who is expecting a delivery of a Saudi diesel cargo at the end of the month, said they have not yet heard any notifications of changes from Aramco.
An ATC official declined to comment on the matter.
“Tightness in ultra low sulfur diesel will be magnified especially since the new Saudi export refineries produce 40 to 45% low sulfur diesel,” Gary Ross founder of Black Gold Investors, told Reuters.
[“source=news18”]
