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Aramco to supply full crude volumes to Asia despite cuts

Aramco Aramco
Oil prices have surged over 14% in July, recording the biggest monthly percentage increase since January 2022

Saudi Aramco has told at least four customers in North Asia they will receive full contract volumes of crude oil in May, several sources with knowledge of the matter said.

The steady supply comes even as the Organization of the Petroleum Exporting Countries (Opec) and allies, known as Opec+, announced an extra output cut of 1.16 million barrels-per-day (bpd) from May for the rest of the year.

A source at an Asian refiner said people are now wondering how the additional voluntary cut would be reflected in the actual supply, or whether it was merely a measure to shore up oil prices.

Oil demand is expected to be weak as several refiners in Asia, such as Sinopec, S-Oil, Fuji Oil and Idemitsu, have planned maintenance in May.

Crude benchmarks jumped six percent last week after the major oil producers jolted market with the additional output reduction.

Saudi Arabia, the world’s top oil exporter and the de facto leader of Opec+, raised prices for the flagship Arab light crude it sells to Asia for a third month in May. It also increased the prices of other oil grades to Asian clients amid expectations of tighter market supply.

Meanwhile, the Abu Dhabi National Oil Company (Adnoc), a state-owned oil giant from the UAE, has informed at least three buyers in Asia that it will supply full contractual volumes of crude in June, trade sources said.