Saudi to import more diesel this year
Riyadh, February 13, 2009
Saudi Arabia will import a third more diesel this year, stoked by robust power and transport demand in the world's top oil exporter, offering some relief to an oversupplied market, industry sources said on Friday.
Around 2.3 million tonnes of diesel are expected to be imported this year, compared with 1.68 million tonnes bought last year, they said.
'A quarter of the imports will be on a spot basis,' said a source, adding the rest will be on a term basis. Saudi Aramco declined to comment.
The kingdom has sealed a deal to buy 7.4 million barrels of gas oil from India's Reliance Industries for 2009.
Last week, Saudi Aramco agreed to buy 3 million barrels of gas oil for delivery March through December from Japanese trader Itochu, bringing total term volumes agreed so far to 10.4 million barrels.
'The firm domestic market for diesel in the Middle East will cause additional activity requiring increased imports from Asia and India,' said the source.
Saudi Arabia typically avoids longer-term supply deals as it strives for fuel self-sufficiency, but low international prices and growing demand may have convinced Aramco to lock in supplies, traders have said.
The shutdown of Aramco's 120,000 bpd Riyadh oil refinery for one month from February to March also contributed to short-term demand for gas oil..-Reuters