Saudi Arabia cuts March crude supply to some Asian buyers: sources

SINGAPORE/DUBAI (Reuters) - The world’s top oil exporter Saudi Arabia has reduced crude supplies to some Asian buyers in March after refiners cut output following the coronavirus outbreak and for regular maintenance, four sources with knowledge of the matter said on Wednesday.

The drop in supplies comes after state oil giant Saudi Aramco cut March official selling prices (OSPs) more than expected.

Buyers’ overall nominations for March-loading cargoes were lower, but so far the virus has not had a big impact, a source familiar with Aramco oil exports said, adding that seasonal maintenance in Asia in the second quarter had made more difference.

Two of the sources declined to say how much lower the volumes were at their refineries, but said Saudi Aramco may have allowed some Chinese buyers to reduce their volumes by more than 10% as their situation was an exceptional case.

Another of the sources said its refinery’s March loading reduction was caused by scheduled maintenance.

China’s refiners, including state-owned Sinopec Corp, PetroChina, China National Offshore Oil Company, and independent refiners such as Hengli Petrochemical and those in Shandong have cut their crude processing rate in February.

The spread of the coronavirus in China has killed more than 1,100 people and slowed the world’s second largest economy.

Saudi oil contracts allow the seller or the buyer to adjust loading volumes by plus or minus 10% of contracted volume, depending on demand and shipping logistics under a contractual clause known as operational tolerance.

Reporting By Shu Zhang in Singapore and Rania El Gamal in Dubai; Writing by Florence Tan; Editing by Barbara Lewis