Saudi Arabia to supply full oil volumes to Asia in August

Saudi Aramco has informed some clients in northern Asia they will receive full nominated volumes of crude oil in August, several sources said on Tuesday.

Meanwhile, top buyer China once again requested less supply.

The world’s biggest oil exporter last week said it would extend its one million barrels-per-day (bpd) output cut by another month to August and increased the prices for most of the crude grades it sends to Asian customers for a second month.

• Saudi GDP growth slows as oil activity to ‘go into reverse’
• Asian refiners expect Saudi to cut August crude prices
• Saudi and Russian oil cuts add to palace intrigue at Opec

However, some Chinese refiners – both state-owned and mega-sized independent refineries – asked for lower supply in August, according to four trading sources.

The sources estimated the combined volume could be about 8 million barrels less than they took for July.

China’s intake of the kingdom’s crude was at a low base in June and July as refineries were seeking cheaper alternatives from the spot market in response to high Saudi oil prices.

Chinese refiners are expected to buy more arbitrage cargoes from West African and Latin American regions as the spread between Brent- and Dubai-pegged oil narrows.  

Meanwhile, China’s onshore commercial crude oil inventory reached about 980 million barrels by the end of June, about 20 million barrels shy of a historical high set in August 2020, according to data analytics firm Vortexa.