Saudi Aramco To Supply Full Oil Volumes Of Crude Oil to Asia

Several knowledgeable sources indicated on Wednesday that Saudi Aramco has assured customers in North Asia that they will receive the full amounts of crude oil they have ordered in June.

However, the sources claimed that several Chinese refiners had asked for lower supply levels in June.

Unknown is how much less crude the Chinese refiners requested in June. Two of the sources predicted a decrease of up to 5 million barrels from May.

Saudi Aramco cut its official selling prices for all crude grades to Asia for June-loading cargoes amid lower refining margins. But the price reduction was less than the market expected.

The falling profit margins have prompted refiners to seek cheaper oil from other suppliers such as Russia, or even consider lowering operational rates.

China is stepping up procurement of discounted Russian oil, with more private mega refineries joining the cargo sweeping, and is taking bigger share of the medium sour Urals market which was dominated by Indian refiners.

The overall full supply volumes come even as the Organization of the Petroleum Exporting Countries (OPEC) and allies, known as OPEC+, announced output cuts of 1.16 million barrels per day (bpd) starting from May for the rest of the year.

Saudi Arabia, the world's top oil exporter, will reduce production by 500,000 bpd under the cuts.