Crude exporter will ramp up imports to compensate offline refinery
Saudi Arabian Oil, the biggest exporter of crude, will more than double its gasoline imports this month and next to replace supply from a refinery under maintenance, three traders with knowledge of the purchases said.
The state-owned company, known as Saudi Aramco, will buy nine to 10 cargoes of mostly 95-RON quality gasoline for delivery each month in April and May, said the traders, who declined to be identified because the transactions are confidential. Dhahran-based Aramco bought about four cargoes a month on average in the first quarter, they said. A company spokesman had no comment when contacted by telephone yesterday.
Middle Eastern crude producers often import products such as gasoline and diesel because they lack adequate refining capacity to meet domestic demand. Saudi gasoline production has decreased since the 550,000 barrel-a-day Ras Tanura refinery, the kingdom’s largest, closed in March for about 45 days of maintenance work.
Aramco is paying premiums of at least US$30 a metric ton more than Mediterranean benchmark prices for its planned imports, which will include some 92-RON quality fuel, the traders said. Most of the shipments will arrive at ports on Saudi Arabia’s Red Sea coast, they said.
A single cargo of gasoline generally contains about 30,000 tons, or 255,000 barrels, of fuel. This means Aramco will import as much as 2.26m barrels each month, or roughly 80,000 bpd, in April and May, one trader said.
The company is seeking additional supply for delivery from June and may buy more than 10 cargoes a month during the Saudi summer months, one of the traders said. Aramco is also buying gasoline to replace fuel the government pledged to neighboring Yemen, they said.
Saudi Arabia consumed about 500,000 bpd of gasoline in 2010, according to a report last month by HSBC Holdings. Demand for the transportation fuel is growing about 6 percent a year, HSBC analysts including John Tottie wrote in the report.
RON, an abbreviation for Research Octane Number, measures how easily gasoline will ignite in an engine.