Saudi Arabia’s state-run shipping company has hired multiple very large crude carriers to carry all the extra oil it plans on exporting next month—a rare move indeed for the shipping company that sports its own fleet of 41 tankers, according to Bloomberg sources.
Bahri, as the Saudi’s shipping company is known, has booked passage for its crude oil on three VLCCs, each with the capacity to haul 2 million barrels of crude. The preliminary bookings are heading to the US Gulf Coast, the sources say—but the bookings could still fail.
The extra VLCC charters are a logical step given Saudi Arabia’s professed plans to ramp up its crude production to more than 12 million barrels per day, after the OPEC+ fell apart last Friday when Russia refused to join in on additional production cuts.
Next month, Saudi Arabia has plans to increase shipments of crude to its prized market, Asia, who will be more than happy to take on more oil at the substantial discount that the Saudis are selling their oil for as part of its oil war strategy. However, trips from to the US take 40 days, and Bahir’s own tankers would not return to Saudi Arabia in time to load these extra volumes.
But all that could change in the blink of an eye.
The other active participant in the oil price war, Russia, said today that it had not ruled out yet the possibility of rekindling its love affair with Saudi Arabia by returning to cooperation with OPEC should necessity dictate. Russian oil companies and the Russian Oil Ministry will hold talks on Wednesday to discuss the matter, Reuters sources said on Tuesday.
By Julianne Geiger for Oilprice.com
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