A number of Saudi crude oil buyers in North Asia have received up to a 10% reduction from their term volumes for November loadings, market sources said Tuesday, a day after Saudi Arabia announced it was preparing to keep its supply allocations for that month a record 560,000 b/d below its customers’ requests.
Saudi Aramco fielded demand for 7.711 million b/d in November loadings but would only allocate 7.150 million b/d, the Saudi energy ministry had said, as the kingdom aims to keep the OPEC/non-OPEC production cut agreement on track in its efforts to rebalance the market. That is far below its exports in November 2016 of 8.258 million b/d, according to the Joint Organizations Data Initiative.

Sources with North Asian refiners said the allocation shortfall was massive, and would add to the tightness in Saudi crude supplies into Asia, given their difficulties in receiving any extra supplies from Saudi Aramco across its exported grades.¬†“Our incremental supply requests for lighter grades have not gone through since September onwards,” a North Asian refiner source said, adding that was in addition to previously unavailable incremental heavier grade supplies.
China, the biggest oil consumer in Asia, is also receiving a cut for November loadings but below 10%, according a Beijing-based source familiar with the matter, to meet demand from the new 200,000 b/d CNOOC Huizhou phase 2 refinery project and PetroChina’s 260,000 b/d Yunnan refinery.