(Jan 9): Crude oil sales from Saudi Arabia to East Asia are set to persist above usual levels after the world’s biggest exporter cut prices for a third month on signs of oversupply in the market.
Asian refiners outside China, including Japan and South Korea, are set to receive at least nine million more February-loading barrels from state-controlled Saudi Aramco than usual, according to traders informed by the producer. They asked not to be identified as they aren’t authorised to speak publicly. Aramco didn’t respond to a request for comment.
Aramco this week lowered the price of crude to Asia, after global benchmarks posted their worst annual decline since 2020 on mounting concerns about a worldwide glut. That makes Saudi oil cheap enough to compete against other so-called spot grades, such as those from nearby Abu Dhabi, traders said.
The volumes would be at least 15% more than average Saudi exports to East Asia of 2.1 million barrels a day in the first 10 months of last year, according to data from analytics and ship-tracking firm Kpler Ltd. Shipments started increasing in November.
China, the biggest importer of Saudi crude, bought about 48 million barrels for loading next month. That’s down slightly from roughly 49 million to 50 million barrels for January.
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In the wider Middle East crude market, there’s pervasive weakness among sellers of spot crude including the United Arab Emirates and Qatar. Traded price differentials have collapsed, and benchmark Dubai remains in a slight contango.
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