RIYADH: Saudi Arabia has cut February term crude supplies to refiners in India and Southeast Asia, seeking to comply with an OPEC deal, but it has held most of its exports to the rest of Asia steady for a second month.
According to details, Saudi Aramco reduced February term supplies of mainly heavy crude to Indian refiners Reliance Industries and Hindustan Mittal Energy Ltd (HMEL), as well as to Malaysia’s Petronas. Aramco has also cut oil supplies to another Southeast Asian buyer for a second month in February.
That means some major oil companies in Europe and the United States could see reductions of up to 18 percent in their term volumes for February.
“Saudi Arabia and Kuwait are focusing their cuts on U.S. and European customers as they target excess inventories and protect market share in Asia,” Energy Aspects analyst Virendra Chauhan said.
Saudi Aramco and the other companies could not be reached for comment. Details on the amounts of the supply reductions could not be confirmed.
Saudi’s February supply reductions to a handful of Asian refiners mark the start of cuts to a region left untouched in January at the onset of the OPEC output deal.
The producer maintained strong exports to Asia in January to protect its market share there and because it gets higher netbacks on sales to the East than it does for other regions.
The Organization of the Petroleum Exporting Countries (OPEC) agreed to cut production by 1.2 million barrels per day (bpd) in the first half of 2017 to reduce a global supply glut and support prices.
World’s top exporter Saudi Arabia cut oil output in January by at least 486,000 bpd to 10.058 million bpd.
Still, Saudi Aramco kept February supplies to most North Asian refiners at full volumes for a second month, trade sources said.
One North Asian refiner received extra crude above its contractual volume for a second month, a source with direct knowledge of the matter said.
