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Saudis Get ‘’Moderate’’ Requests To Replace Lost Iranian Oil Supply

Oil tanker

Saudi Arabia has received several “moderate” requests to replace Iranian oil next month, Bloomberg reports, citing an anonymous source familiar with Riyadh’s oil plans.

The report comes on the heels of news that OPEC’s de facto leader and largest producer has raised export prices for Asian customers for June and July due to additional requests for exports.

According to a Reuters update, Saudi Arabia’s Arab Light for June delivery sells at a premium of US$2.10 per barrel to the Oman/Dubai average, up by US$0.70 per barrel from cargoes for May delivery. Riyadh also raised the price of this most popular among its grades for Europe, by US$0.80 a barrel from the price of shipments for May delivery. The price for oil exports to the United States, however, was reduced.

Interestingly enough, however, Saudi Arabia has no plans to start raising its oil production, the Bloomberg source noted. In March and April, the Kingdom pumped some 9.8 million bpd, below its quota of 10.311 million bpd assigned to it by the OPEC+ joint ministerial committee.

Related: Oil Production Booms… But Funding Is Drying Up

What’s more interesting, however, is that, according to the source, Saudi Arabia had no plans to increase its overall exports next month. This means it would have to cut shipments to some destinations to satisfy reported Asian demand. The total Saudi exports in June are seen at less than 7 million bpd, with more oil remaining at home to use for air conditioning, earlier media reports said.

Earlier this month, reports emerged, again quoting unnamed sources close to Riyadh, that Saudi Arabia could actually increase its oil production in June. However, those sources said, speaking to Reuters, that this did not mean the country would increase exports.

“The Saudis want oil prices to stay at current levels at least for a month or two. They don’t want to raise their production above the 10.3 million bpd, because they are part of the OPEC+ pact, but they are also being pressured by the U.S. to increase their output,” one of the sources said at the time.

By Irina Slav for Oilprice.com

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