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SINGAPORE/NEW DELHI: Top oil exporter Saudi Arabia has cut supplies of February-loading crude for at least three Asian buyers while meeting requirements of at least four others, several refinery and trade sources with knowledge of the matter said on Wednesday.
This comes after Saudi Arabia pledged additional voluntary output cuts of 1 million barrels per day (bpd) in February and March under a deal between the Organization of the Petroleum Exporting Countries and its allies including Russia, a group known as OPEC+.
Most OPEC+ producers will hold production steady in the face of new coronavirus lockdowns. Global oil prices are trading at their highest since February following Saudi’s decision.
Two North Asian refiners have received a 10% supply cut while an Indian refiner was given a near 20% reduction in volumes, the sources said on the condition of anonymity.
Last year, the state energy giant cut June-August shipments to Asian term buyers to comply with the OPEC+ agreement.Saudi Arabia exported about 7 million barrels per day of crude of which around 70% landed in Asia last year, data on Refinitiv Eikon showed.
While the additional Saudi oil supply cut could help support the spot market this month, Asia’s crude consumption is expected to fall amid seasonal refinery maintenance while arbitrage supplies from the west could supplement demand, trading sources said.
Refiners, including India’s HPCL-Mittal Energy Ltd (HMEL), Taiwan’s Formosa Petrochemical Corp, and Thailand’s IRPC Pcl and Bangchak Corp, are heading into maintenance in the first quarter.Japan’s Idemitsu Kosan Co has shut a 150,000 barrels-per-day (bpd) crude distillation unit (CDU) following a fire mishap.
REUTERS