Saudi Arabia told major oil companies and Asian refiners yesterday that it would not relent on its oil export curbs next month, despite crude prices nearing record highs. In monthly notices sent to its customers, state oil giant Saudi Aramco said it would continue to supply its Asian lifters with about 9.5 to 10 per cent less than their full contractual volume in August, as it has done since April, two industry sources in Japan and another in South Korea said."The supply is unchanged from July," one source said. "We have already taken this curb into account."
Another source said that the reduction was made in more than one crude grade.
Aramco has also informed oil majors and at least three European refiners that the world's top exporter would not increase shipments in August, in line with expectations as Opec maintains that a shortage of fuel, not crude, is driving prices.
| Last year, they had been ramping up production, pushing stocks sharply higher, and at the end of the summer oil prices plunged. This time, they are cautious. |
The curbs were imposed as part of Opec's pledges late last year to take 1.7 million bpd of output off the market in order to draw down swollen crude inventories and support prices, although so far they have achieved only half of their mission.
With US crude stocks still hovering at nine-year highs, Opec officials have stood firm even as Brent crude oil hits a succession of 10 and 11-month highs, and now stands above $76 a barrel, less than $3 away from a record high. London Brent crude was down 11 cents at $76.29 by 0230 GMT.
US weekly crude inventories were expected to have risen another 100,000 barrels last week, according to a Reuters poll of analysts.
The Opec next meets to discuss production policy on September 11, after the end of the peak summer oil demand season, when some traders expect rising refinery runs quickly to erode hefty inventories. For the moment, however, many analysts concur with Opec's argument that soaring prices are the result of lagging refinery operations in big consumer nations plus speculation fuelled by geopolitical jitters, not a lack of crude production.