Aramco to import more fuel on supply shortage
Riyadh, March 21, 2012
Saudi Aramco, the world's largest oil exporter Saudi Arabia's state oil firm, is expected to import higher-than-usual volumes of gasoline and gasoil.
The increased import will plug a supply shortage caused by refinery maintenance and firming demand ahead of summer season, traders said on Wednesday.
The refiner has been aggressively seeking gasoil and gasoline in the spot market after having already bought 20 per cent more gasoil for March. Its gasoil imports for April are expected to be even higher than March, traders added.
As for gasoline, traders are expecting the volumes to be between six and nine cargoes for April alone.
'That's quite a huge amount for gasoline for a month,' said a trader.
Traders said Saudi Aramco could be stockpiling on gasoline ahead of Ramadan to avoid being caught in short supplies as experienced last year.
Its Ras Tanura refinery, which is the Middle East's largest with a crude processing capacity of 550,000 barrels per day (bpd), has shut several units including a crude unit in March for a planned maintenance.
This came at a time demand for gasoil usually peaks in summer in the Middle East as the product is used for power generation purposes.
While exact gasoil volumes purchased by Saudi Aramco are not known, traders estimate it has bought at least about 200,000 to 300,000 tonnes more for March than in February.
April volumes into Saudi Arabia are likely to increase further, which could push premiums for the 500 ppm sulphur gasoil above the current one-year high levels, they added.
'They're buying a lot. Surprisingly a lot more than anticipated,' said another middle distillates trader.
'They have been looking for prompt delivery dates but are also interested in later dates, and are asking traders to show how much volumes they are able to supply,' a third trader said. 'They're still looking for barrels, that's for sure.'
At least two gasoil cargoes have been fixed for voyage from Bahrain and India to Saudi Arabia for March loading, traders said.
Supply of the 500 ppm sulphur gasoil, a grade commonly used in the Middle East for power generation, has been tight due to refinery turnarounds in region and Asia.
This has in turn pushed up premiums in recent tenders in the Middle East and Asia. – Reuters