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A unit of Saudi Aramco has entered into a deal to buy the stake of commodities trader Gunvor in a Rotterdam oil terminal as the Saudi oil giant seeks to boost its market share in northwestern Europe.
Saudi Aramco’s subsidiary Aramco Overseas Company is buying Gunvor Group’s stake in the Maasvlakte Olie Terminal (MOT) in Rotterdam, the Netherlands, in a deal expected to close by the end of this month, the state-held oil firm of OPEC’s biggest exporter Saudi Arabia said in a statement on Thursday. The parties, however, did not disclose the financial terms of the deal.
Gunvor had bought the stake in the oil terminal when it acquired Gunvor Petroleum Rotterdam back in 2016. Now the sale of the oil terminal stake is part of the oil trader’s strategy to further develop its Rotterdam refining operations, Aramco and Gunvor said in the joint statement.
Gunvor and other major commodity trading houses have started to divest major stakes they hold in storage as the overhang in global oil supply started to decline. At the end of March, Glencore agreed to sell 51 percent in its petroleum products storage and logistics business to China’s HNA Innovation Finance Group Co Ltd for US$775 million.
For Saudi Aramco, the acquisition of a stake in the Rotterdam oil terminal adds to other stakes in storage the company owns in the area, “allowing for expanded offerings in the North West Europe refining hub.”
“This will complement Saudi Aramco’s export activities in Europe, strengthen the company’s supply chain and enhance its customer services in the region,” Aramco said.
While Saudi Arabia is leading the OPEC/NOPEC production cuts, it is losing market share in the prized Asian markets, to none other than its partners in the pact to scale back production—other OPEC members and the leader of the non-OPEC group of producers, Russia.
Now Aramco is pushing for more Saudi supply into Europe. Earlier this month, the Saudis deepened November discounts for all their grades for Northwest Europe.
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.