State-controlled Saudi Aramco has begun offering prompt spot crude cargoes to refiners in Europe, according to traders, adding to a glut of Mideast Gulf supply in the region.
Aramco has contacted term customers in Europe seeking bids for October-loading spot cargoes from the Mediterranean port of Sidi Kerir and the Red Sea port of Yanbu, traders said. Bids were requested against Ice Brent. Aramco declined to comment.
Traders expect bids to come in at the equivalent of a discount to North Sea Dated or around parity with the benchmark, reflecting the prompt loading window.
Increased availability of competitively priced Saudi crude comes as ample supplies of Iraqi Basrah have pressured Atlantic Basin crude differentials by around $1-5/bl against Dated over the past week.
Aramco has historically supplied European customers exclusively through term contracts. But several refiners in the region saw their September and October term allocations severely delayed or cancelled following disruptions to Red Sea shipping and the 10 September attack on Saudi Arabia's 7mn b/d East-West Pipeline.
The cargoes now being offered on a spot basis could include volumes originally earmarked for those customers.
Traders said Polish refiner Orlen had purchased at least 2.4mn bl of the October-loading spot supplies, in addition to its October term allocations, although this could not be directly confirmed.
Orlen was among the largest buyers of Saudi spot crude when Aramco last offered supplies to Europe in July, traders said. TotalEnergies was another major buyer.
At least three Mediterranean refiners have received their November term allocations, according to market participants.
Refiners in the Asia-Pacific region have so far been the main beneficiaries of Aramco's recent shift towards spot sales, buying at least 142mn bl since mid-September. Those cargoes loaded from Ras Tanura in the Mideast Gulf and were sold either on a ship-to-ship (STS) transfer basis or for direct delivery to customers.
