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Saudi Aramco, the world’s largest crude oil exporter, has told at least four refiners in North Asia that it would supply them with the full contractual volumes they have nominated for November, Reuters reported on Tuesday, citing sources familiar with the plans.
“The supply and demand for Saudi oil seem stable at this moment, despite the high prices,” one of the sources told Reuters.
Aramco will thus ship the full crude oil volumes that at least four customers in North Asia have asked for under their term contracts.
Last week, Saudi Arabia extended its voluntary production cut of 1 million barrels per day (bpd) through December 2023 and on the following day Aramco raised the official selling price (OSP) for its flagship crude grade for Asia for a fifth consecutive month.
Last Wednesday, Saudi Arabia said it would continue cutting an extra 1 million bpd from its crude oil production in November and December and would continue to pump around 9 million bpd. The Saudis said that “This voluntary cut decision will be reviewed next month to consider deepening the cut or increasing production.”
A day after Saudi Arabia and Russia affirmed their ongoing oil supply cuts, Saudi Aramco raised the price of Arab Light, its flagship crude grade, for Asia for November loading. The price hike of $0.40 per barrel was the fifth consecutive increase for the Arab Light blend to Asia, bringing the OSP to $4 a barrel over the Oman/Dubai average, the Middle Eastern benchmark, off which grades going to Asia are being priced.
The increase in Saudi prices for most grades to most markets in November was largely expected by refiners and traders amid strong demand and tightening supply as OPEC+ and its key market movers Saudi Arabia and Russia continue to restrict crude oil production and exports.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.