Saudis raise pricing on Asian crude deliveries after attacks cut output
SINGAPORE (Bloomberg) - Saudi Arabia, the world’s biggest crude exporter, raised all pricing for November oil sales to Asia as refining margins rose and the country’s state oil producer pulled out the stops to maintain supply after aerial attacks briefly knocked out half its output last month.
State-oil producer Saudi Aramco increased its official selling price for Arab Light crude for November shipment to buyers in Asia by $0.70/bbl to a premium of $3 above the Middle East benchmark. Five traders and refiners in a Bloomberg survey had expected pricing for the grade to rise by $0.55/bbl to a premium of $2.85/bbl.
Saudi Arabia experienced the worst-ever attack on its energy infrastructure when more than two dozen explosives-laden drones and missiles smashed into some of its biggest crude-processing facilities. The attacks at Abqaiq and Khurais in the kingdom’s east caused Aramco to halt 5.7 MMbpd of Light crude production. The country has succeeded in raising output to 9.9 MMbpd, Prince Abdulaziz bin Salman, Saudi energy minister, said at the Russia Energy Week conference in Moscow.
- Aramco raised pricing for Medium, Light and Extra Light crudes to Asia by $0.70/bbl as profit from processing Middle East crude rose to the highest levels since May
- Light barrels were most affected by the attacks, cutting availability to refiners
- Aramco substituted with some Medium or Heavy grades to maintain supply
- Spread between Heavy crude and Light, Extra Light barrels widens to the most this year
- Refining margins rise on seasonal demand, lower run rates, and shifts in product demand spurred by IMO ship fuel rules taking effect in January
- After Sept. 14 attacks, Aramco cut refinery runs to make more crude available for export, and the company’s trading unit bought refined fuels