April 20, 2018 / 6:59 AM / 7 months ago

Shell snaps up more than eight million barrels Mideast, Russia oil in Asia: sources

FILE PHOTO: Filled oil drums are seen at Royal Dutch Shell Plc's lubricants blending plant in the town of Torzhok, north-west of Tver, November 7, 2014. REUTERS/Sergei Karpukhin/File Photo

SINGAPORE (Reuters) - Royal Dutch Shell has snapped up more than 8 million barrels of Middle East and Russian crude oil loading in June and resold some cargoes at higher premiums as it profits from robust demand in Asia, five trading sources said on Friday.

The region’s pull on Middle East and Russian grades, priced off Middle East crude benchmark Dubai, has strengthened this month as a widening of Brent’s premium to Dubai has made competing Atlantic Basin supplies more expensive.

Asia’s crude demand is also set to rise in the third quarter as refiners return from maintenance to ramp up output to meet peak summer oil consumption.

Shell has bought six June-loading cargoes of Qatar Marine, four cargoes of Upper Zakum and three cargoes of Russian Sokol crude from various market players, two sources directly involved in the trades said.

The oil major has also purchased at least a cargo each of Banoco Arab Medium and al-Shaheen crude, they said.

Each cargo of Middle East crude is about 500,000 barrels while a Sokol cargo is 700,000 barrels. The company has the option of re-selling some of the crude or can send the oil to its refineries.

Shell said it does not comment on details of commercial agreements or the movement of cargoes.

Shell’s purchases have reduced the availability of spot cargoes in the market, leaving the oil major as the sole seller for some grades, the sources said.

Shell has resold one of the Qatar Marine cargoes to a Thai end-user at a premium of more than 20 cents a barrel to the crude’s official selling price, versus earlier deals at premiums of 10-20 cents, they said.

Reporting by Florence Tan; editing by Richard Pullin

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