Asian refiners are demanding for more crude Saudi Arabia as buyers in the world’s top oil-consuming region face supply disruptions from Iran to Venezuela.
Customers required additional cargoes for loading in June and July from OPEC’s biggest producer reporter said
The requests are for supplies on top of what the refiners are due as part of term contracts with state-run Saudi Aramco.
U.S. decide to end sanctions waivers for buyers of Iranian oil after current exemptions expire on May 2. Unexpected disruptions to supply from Russia and Nigeria as well as turmoil in OPEC member Venezuela are also adding to fears of a crunch. Prices have seesawed in the past week on uncertainty over how Saudi Arabia will respond, with the American administration saying the kingdom will pump more.
The Saudi Oil Minister Khalid Al-Falih has said “the producer will seek to keep the market balanced, he’s also signaled that OPEC and its allies including Russia could extend output curbs until the end of this year. In Asia, the end of the U.S. exemptions that allowed purchases from Iran has caused a headache for processors, who are being forced to seek potentially costlier alternatives”.
However, some Asian refiners are asking Aramco for more crude even before the sets of cargoes cost, Official selling prices for June-loading shipments are likely to be announced before the week runs out. Usually, buyers will request supplies a few days after the company sets prices for the month.
Bank warned of higher price volatility in coming months saying the market could suffer a loss of as much as 900,000 bpd of Iranian oil, according to Goldman Sachs Group, after the U.S.-issued waivers expire. The resulting shortfall is expected to be offset by higher production from core producers in OPEC and Russia.