Saudi to reduce crude exports to India in July, significantly slash volumes to US
The Dollar Business Bureau
Saudi’s Aramco plans to deepen the cuts in oil to US, reduce the limit in supplies to some of its Asian client countries in July according to Reuters.
Aramco has decided to supply full contracted crude volumes to buyers in North Asian countries, while countries like China, South Korea and India will get lower volumes.
The reduction in barrels in July will be deeper than seen in June, which is 300,000 bpd. An unofficial release by a spokesperson of Aramco told a media house that the decision to reduce oil supplies to Asia by about 7 million bpd was conveyed in May. This was the first cuts that the region would experience since the ‘OPEC-led output reductions’ took effect in January.
Allocations to US will be reduced significantly to almost 35% in July to force a reduction in the US inventories which were preventing a rise in global prices. Supplies to Europe have been curtailed to 11% the Aramco spokesperson divulged.
China has opted for lower volumes in July due to planned refinery maintenance while North Asian customers would get full volumes of crude in the same month. Indian supplies would be reduced by about 200,000 bpd in July, China’s supplies would see a reduction of 110,000 bpd while Japan and Taiwan would receive full volumes.
India is likely to supplement the gap in the decreased volumes of crude by Saudi Arabia by getting oil from West African countries and Iran.
Saudi Arabia annually reduces supplies to its client-countries, to meet its own domestic demand during its intense summer months but this year it had the additional need to meet its country’s demands during the fasting month of Ramadan which began in late-May.
It should be recollected that last month an OPEC-led agreement to curb global oil supplies was extended until March 2018.