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Saudi Aramco Aims To Nearly Double Its Oil Trading By 2020

Aramco Trading, the trading arm of Saudi Arabia’s oil giant Saudi Aramco, will be looking to trade up to 6 million bpd of crude and refined products by 2020, up from 3.6 million bpd now, Aramco Trading’s chief executive Ibrahim Al-Buainain told Bloomberg in an interview in Abu Dhabi.

Nearly doubling its oil trading volumes would put Aramco in a position to rival the world’s largest independent oil trader, Vitol Group, which traded just over 7 million bpd of oil and oil products last year. To compare, Shell and BP—both integrated oil companies like Saudi Aramco—handle 12 million bpd and around 8 million bpd, respectively, according to Bloomberg data.

Aramco Trading—launched in 2012—initially traded only refined products, but in 2017 it began to trade third-party crude oil to deliver to its refineries outside Saudi Arabia. The trading arm also sells Saudi crude oil to refiners who don’t have long-term crude delivery deals with Saudi Aramco in exchange for oil products processed at the same refineries. Aramco Trading’s crude oil volumes trade is still small, Al-Buainain told Bloomberg.

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Saudi Aramco aims to expand its downstream presence globally, especially on the prized Asian markets, to secure long-term sales outlets for its crude oil.

Related: How High Can Trump Push Oil Prices?

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Earlier this month, Aramco signed a preliminary deal with an Indian consortium to study the construction of a mega refinery and petrochemicals complex on India’s West Coast estimated to cost US$44 billion. The refinery is planned to be capable of processing 1.2 million barrels of crude oil per day.

Another national oil company in the Middle East—the Abu Dhabi National Oil Company (ADNOC)—also aims to boost trading to support its international downstream growth plans. ADNOC said on Monday that it was establishing a new trading unit that would “manage non-speculative trading to further maximize value from every barrel of crude oil and refined product that is produced and marketed by the company.”

By Tsvetana Paraskova for Oilprice.com

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Leave a comment
  • Mike on April 25 2018 said:
    Yet we're made to believe that they are wanting to move away from oil. lol
  • Neil Dusseault on April 24 2018 said:
    Is this to say that PPT (Price Protection Teams) do in fact exist?

    I really don't want to sound as though I am a tin-foiled hat-wearing conspiracy theorist, but I have been told by both American & Canadian contractors hired by both the Saudis and Kuwaitis as consultants for oil plants that there are government employees who trade WTI and Brent, strategically placing long orders (bullish bets) to prevent the price of oil from plummeting.

    In a way it makes sense, as a sort of hedge against the very product the country receives a majority of its revenue from...until you realize that is biased, unfair, and that the seed money for the accounts to trade such positions in the futures market comes from American & Canadians (and of course, others) for their oil.

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