Saudi Arabia to Supply Full Crude Oil Volumes to Asia

By Christian Schmollinger and Yuji Okada

Dec. 10 (Bloomberg) -- Saudi Arabian Oil Co., the world’s largest producer, will supply full volumes of crude to refiners in China, South Korea and Japan for January.

Saudi Aramco, as the company is known, will provide 100 percent of cargoes sold under long-term contracts next month, according to a Bloomberg News survey of refinery officials in Japan, South Korea, China, who asked not to be identified because of confidentiality of agreements with the company.

For December, Saudi Aramco will provide full volumes to refiners in Japan while other Asian refiners will get 85 percent to 90 percent of their contracted deliveries.

Aramco on Dec. 6 raised the official selling price for its Medium grade by 10 cents to a discount of 45 cents a barrel to the average price of Middle East benchmarks Oman and Dubai. It Heavy crude was increased by 20 cents to a discount of $1.25 a barrel. Arab Light, the country’s largest export type, was lowered by 5 cents to a premium of 45 cents a barrel.

Super Light crude was raised by 40 cents to a premium of $1.70 a barrel while Extra Light was left unchanged at a premium of $1.25 a barrel.

Saudi Arabia has reduced its output under the production quotas instituted by the Organization of Petroleum Exporting Countries. The country is OPEC’s biggest producer.

Saudi Arabia has an OPEC production quota of 8.051 million barrels a day. In November, the kingdom pumped 8.19 million barrels a day, up from 8.19 million barrels a day in October, according to a Bloomberg News survey.

OPEC’s compliance with its production target has slipped as crude prices have climbed. The target for the 11 members with quotas, all except Iraq, is set at 24.845 million barrels a day. Since reaching a low of 25.32 million barrels a day in March, output has climbed to 26.5 million barrels a day last month.

Crude oil traded in New York was at $70.68 a barrel at 12:21 p.m. Singapore time. Prices have gained 59 percent this year. The OPEC price basket, a volume-weighted average of the various grades produced by the group, was at $74.60 on Dec. 8, the last day it was calculated. That’s up from $37.73 a barrel a year ago.

To contact the reporters on this story: Christian Schmollinger in Singapore at christian.s@bloomberg.net; Yuji Okada in Tokyo at yokada6@bloomberg.net