Aramco maintains July crude cuts to some Asian buyers

Saudi Arabia's state-controlled Saudi Aramco has reduced July-loading crude allocations to some of its Asia-Pacific term buyers by around 20pc from contractual volumes, although the firm did not make any cuts for a few buyers, refiners said.

Four Asia-Pacific refiners received cuts of around 20pc, or slightly smaller than 20pc, to their Aramco contractual crude volumes for July loading. One of the refiners had nominated below contractual volumes and received what they had requested for, while one of the refiners had nominated above contractual volumes.

Three northeast Asian refiners received full contractual volumes from Aramco for July loading. The three refiners had nominated their normal contractual volumes for July and received what they asked for. It was unclear why some refiners' allocations were not cut. Aramco may have given full allocations to some buyers that have small term loadings, traders said, although this could not be verified.

The cuts in Aramco's July allocations to Asia-Pacific were within expectations, refiners said, given the 6 June Opec+ agreement to extend the first phase of its historic two-year production restraint deal to the end of July for all participants except Mexico.

Aramco last month cut June-loading crude supplies to some northeast Asian refiners by 20-25pc from their requested volumes, while some buyers got slightly larger cuts of up 30pc.

Aramco had raised its official crude formula prices for July-loading cargoes to Asia-Pacific by $5.60-7.30/bl from the previous month, exceeding buyers' expectations. Other Mideast Gulf producers including Kuwait, Iraq, Iran, Abu Dhabi and Qatar also raised their July official formula prices to Asia-Pacific by a similar amount. Several northeast refiners are looking more at arbitrage cargoes, such as Russian Urals, Caspian CPC Blend and US WTI because of the higher Mideast Gulf crude prices.

By Azlin Ahmad, Fabian Ng