Saudi diesel import set to hit record levels
Singapore, May 20, 2013
Saudi Arabia will import near record high diesel volumes this summer, as it gears up to beat the sweltering heat and meet rising travel needs during the fasting month of Ramadan, trade sources said.
State oil giant Saudi Aramco will import up to 8.9 million barrels of diesel in June, up from an estimated 6.7 to 7.5 million barrels in May, according to the sources, who expect at least the same volume or higher to be booked for July.
Top oil exporter Saudi Arabia shipped in record diesel volumes of 8.99 million barrels in July, 2011, up from 8.13 million in June that year, government data published from 2002 through the Joint Organisations Data Initiative showed.
"I think this year, the July, 2011 number might be surpassed as Saudi's diesel demand is growing every year and their new refinery is not expected at least until later this year," a Gulf-based trader said.
Higher overseas purchases by Saudi Arabia should help boost spot premiums and support weak Asian gasoil margins as Aramco imports from countries such as India and Singapore.
Aramco relies heavily on imported diesel in summer when demand for electricity peaks with rising use of air conditioning as temperatures soar to a grilling 50 degrees Celsius.
To cut its imports, Aramco has planned three new refineries. But the first of these which will produce 176,000 barrels per day of diesel comes online in the second half of 2013, instead of the second quarter as previously expected, traders said.
Until the refinery -- a joint venture with France's Total and Saudi Aramco Total Refining and Petrochemicals Co's (SATORP) Jubail refinery -- is at full capacity, Aramco will buy heavily to ensure it is covered for Ramadan, when travel within the region significantly picks up.
This year, Ramadan is due to start in early July.
"Aramco's expecting very high demand this summer and they are stocking up before Ramadan. The demand growth is higher compared to previous summers as there are several infrastructure expansion projects ongoing," one middle distillates trader said.
Refinery glitches also led to higher imports, traders said.
"The Sasref unit was down and the Jeddah refinery maintenance has been extended. These all add to why they're buying higher than usual. The summer demand is already here and they need to stock up for more."
Saudi Aramco shut a desulphurisation unit at its 305,000 barrels-per-day joint venture Sasref Jubail refinery with Royal Dutch Shell in April due to a problem.
Spot premiums for the 500 parts per million (ppm) sulphur gasoil, which is the grade imported by Saudi Arabia, have edged up ahead of the summer demand.
Bahrain Petroleum Co last sold a 500 ppm sulphur gasoil cargo for loading in May at a premium of $2.60 a barrel, up to 30 cents more than an earlier April loading cargo, traders said.
There have been no diesel cargoes offered for exports for loading in June by Gulf refiners so far, suggesting the region's demand has risen, they added.
Saudi Arabia's gasoline imports are expected to be around 4.5 million barrels in June, which is about 45 percent higher than the same period last year, traders added. - Reuters
More Energy, Oil & Gas Stories
- GE Power Conversion wins major SEC order
- Basra Light crude exports to rebound in April
- Aramco to produce unconventional gas for projects
- Alstom opens smart grid centre in Dubai
- Experts discuss key geosciences issues
- Egypt to permit factories to use coal for energy
- ME oil, gas transaction value up 15pc
- Victrex to showcase new product in Paris
- Aramco JV puts off giant refinery overhaul to 2015
- Libya threatens to bomb N Korean tanker
- Bahrain 'producing 850MW of surplus power'
- 2,000 experts for Bahrain geosciences summit
- Libyan rebels start oil exports, bypassing govt
- Dubai drilling company set for London IPO
- Opec output soars on higher Iraq exports
- S Korea to pay Iran $550m under nuke deal
- Qatar LPG exports will stay unchanged till 2018
- $14bn Bahrain energy sector focus for summit
- Iraq now world's fastest-growing oil exporter
- Old IT systems pose risk to oil firms
- Thomson Reuters adds commodity monitoring tool
- Oil below $90 to hit GCC economies
- GlassPoint appoints new Oman director
- Sheffield company opens Dubai hub
- Oman targets big rise in gas output
- Intertek buys UAE firm for $66m
- Qaiwan to tender Baizan refinery EPC contract
- Al Maha wins Oman Air fuel supply deal
- Iran to become top gas importer by 2025
- UAE hydrocarbon projects seen hitting $11bn