TOKYO/SINGAPORE (Reuters) – Top oil exporter Saudi Arabia will raise crude sales to major Asian refiners by a tenth in November, making good on OPEC’s pledge to boost output in an effort to cool prices, industry sources said on Thursday.
News of higher shipments to Asia — which buys about half of the kingdom’s 7 million barrels per day (bpd) of exports — was expected after state firm Aramco told European customers a day ago that it would maintain supplies unchanged versus October.
Sources at two Japanese refiners and one in South Korea said Aramco would supply the entire volume agreed under the refiners’ annual contract, the first 100 percent allocation in a year.
In October, before OPEC’s supply hike came into effect, the Saudis supplied key Asian customers with about 90 percent of contracted volumes.
“It was just what we requested,” said one Japan-based industry source.
If the 10 percentage point hike in shipments is given to all refiners across the region, as is often the case, it would equate to a roughly 350,000 barrel per day (bpd) increase in exports, seemingly more than its share of the cartel’s 500,000 bpd rise.
The move comes after September’s OPEC meeting at which Saudi Arabia persuaded fellow members to raise output in a gesture to consumer nations worried about the impact of $80-plus oil.
Despite record high crude prices, refinery profit margins have held up better in Asia than in other regions, and refiners have said they need the extra crude in November partly to compensate for the loss of exports from Abu Dhabi, where heavy offshore oilfield maintenance will cut output by 600,000 bpd.