State-controlled Saudi Aramco will supply two of its European term buyers with their requested December volumes, while a third opted not to nominate any Saudi crude, citing weak bitumen demand.
Term contracts require buyers to nominate volumes throughout the year to meet agreed annual allocations. Some refiners that had not yet completed their nominations may have done so in December.
European crude demand typically softens toward the end of the year as refiners destock for tax and accounting purposes. This year, rising Mideast Gulf output could add to a glut of medium sour grades in Europe. Eight core Opec+ members agreed to raise their collective production ceiling by 137,000 b/d in December, matching increases for October and November.
Most European refiners had expected Aramco to cut its December formula prices by $1–2/bl against Ice Brent. But Aramco kept prices for European customers unchanged, possibly reflecting recent strength in medium sour grades popular in the region. Iraqi Basrah Medium and Norwegian Johan Sverdrup are both at multi-week highs, as tighter sanctions affecting similar-quality Russian crude spurred Asian buying of medium sour alternatives.
Aramco's steep December price cuts for Asian buyers had mixed effects. Chinese refiners — the largest buyers of Saudi seaborne crude — are set to receive lower December volumes, prompting other buyers, including India, Japan and South Korea, to request more, market participants said.
Three consecutive months of Aramco price cuts for Europe starting in September triggered an influx of Saudi medium sour crude into the region. Saudi loadings to Europe in September and October were 37pc and 17pc higher, respectively, than the January–August average, Vortexa data show. Iraqi flows were also elevated, and the trend is likely to continue in November.
Saudi crude deliveries to Europe so far this year have averaged about 707,000 b/d, down by 6pc from the same period in 2024. The decline may be partly explained by the restart of medium sour Kirkuk crude exports from Ceyhan in late September, after a 2½-year halt, with most volumes heading to Mediterranean buyers.
