SINGAPORE/SEOUL (Reuters) - Saudi Arabia will supply full contracted volumes of crude oil to at least five north Asian term buyers in October, while a sixth regional refiner was notified of cuts to its October Arab Extra Light supplies, sources familiar with the matter said on Monday.
The October allocations are in contrast to the steep cuts in the September allotments and reaffirms Saudi Arabia’s desire to maintain its Asian market share. Saudi Arabia is the world’s biggest crude exporter.
Saudi Arabia is likely taking advantage of the lower refinery run rates and ample crude inventories in the United States in the wake of Hurricane Harvey, to redirect the allocation cuts from Asia to the United States, a trader who specializes in Middle East crude supplies said.
“Saudi allocations are all about the math. They can cut U.S. allocations and supply that to Asia,” the trader added.
A source from the sixth Asian refiner said that its October supply of Arab Extra Light crude was cut by 10 percent, likely because of repair work in September at Saudi Arabia’s Abqaiq oilfield, which produces the grade.
Saudi Arabia plans to cut crude oil allocations to its customers worldwide in October by 350,000 barrels per day (bpd), an industry source familiar with Saudi oil policy told Reuters on Thursday, in line with Saudi Arabia’s commitments to a supply reduction pact by the Organization of the Petroleum Exporting Countries and other producers.
In comparison, Saudi Arabia pledged last month to cut its September crude oil worldwide allocations by 520,000 bpd.
Reporting by Florence Tan and Mark Tay in SINGAPORE, Jane Chung in SEOUL and Osamu Tsukimori in TOKYO; Editing by Kenneth Maxwell and Christian Schmollinger