Saudi Aramco to cut supply to Asia by 9%

SINGAPORE: Saudi Aramco, the world’s largest state oil company, will cut crude oil supply to Asian refiners in April by an average 9 percent below contracted volumes, more than the 7 percent reduction in March exports.

Saudi Aramco will mainly lower Arab heavy crude oil exports, said refinery officials who received notices from the company. They asked not to be identified because of confidentiality agreements with the Dhahran, Saudi Arabia, oil producer.


Customers will receive less crude oil as Saudi Aramco complies with Organization of Petroleum Exporting Countries’ production quotas agreed last year. The oil producer is cutting exports of its heavy crude to Asia after demand fell as the refining profit to process that grade declined. OPEC meets Thursday at its Vienna headquarters to discuss second-quarter output.

“It’s operational rather than trying to push the market price up,” said Larry Grace, a Hong Kong-based energy analyst at Kim Eng Securities. “The heavy crude being taken further off than the light crude is usually connected to the regional crack spreads,” or refining profit, he said. Crude is known as the crack.

IHT