Newswire — Saudi crude oil export volumes to China are expected to take a dip in February after Aramco raised its price for February deliveries—for the first time in three months.
According to a Reuters report citing unnamed trade sources, Saudi oil shipments to China next month would stand at 43.5 million barrels, which would be down from 46 million barrels this month. Aramco is seen reducing deliveries to CNOOC and PetroChina while boosting deliveries to Sinopec and Sinochem.
Earlier this week, Aramco raised the price of its flagship crude grade, Arab Light, by $0.60 per barrel to a premium of $1.50 a barrel over the Oman/Dubai average, the benchmark off which Middle Eastern crude oil going to Asia is priced, a price list seen by Bloomberg showed on Monday.
Saudi Arabia typically announces around the fifth of each month its crude pricing for the following month and doesn’t comment on price changes. It also sets the tone for the pricing to Asia of the other major oil producers in the Middle East.
The hike in Saudi Arabia’s official selling prices for Asia for next month was more than the $0.10-per-barrel increase expected in a Bloomberg poll conducted among traders and refiners.
The price hike comes as the OPEC+ group, led by Saudi Arabia, continues to withhold supply from the market, barrels from Iran and Russia are shrinking amid tightening Western sanctions on tankers, and Middle East benchmark prices are rallying.
OPEC’s output was also likely down in December, adding fuel to higher oil prices. A Reuters survey suggested the cartel’s combined total shed 50,000 bpd last month, for an average daily of 26.46 million barrels. The decline came mostly from the UAE, where field maintenance reduced output by 90,000 bpd, and Iran, where production declined by 70,000 bpd in December.
*Irina Slav – Oilprice.com
