Saudi Arabia’s oil exports to Asia rose in November, while Russia’s crude sales in the world’s most important oil-importing region fell amid lower purchases by Moscow’s two key markets, China and India.
Recovering Asian refining margins, a decline in the premium of the Dubai benchmark to Russia’s Urals, and rising shipping costs for Russia’s crude helped Saudi Arabia boost its crude oil supply to Asia by 550,000 barrels per day (bpd) in November, according to data from LSEG Oil Research cited by Reuters’s columnist Clyde Russell.
Saudi crude oil exports to Asia jumped to 5.83 million bpd last month, up from an estimated 5.28 million bpd in October.
At the same time, Russia’s oil sales in Asia in November fell by 450,000 bpd, to 3.51 million bpd in November, compared to 3.96 million bpd in October, per LSEG Oil Research data.
Both India and China, Russia’s key export markets, saw lower Russian crude arrivals last month, while their imports of Saudi crude rose, the data showed.
The rise in Saudi Arabia’s exports to Asia was likely due to a lower premium of the Dubai quotes over Russia’s flagship grade Urals, as well as higher costs to shipping crude all the way from Russia’s western ports to India, Reuters’s Russell argues.
The Saudis boosted their crude oil sales in Asia last month despite the increased official selling prices of their grades to Asia for November.
In early October, Saudi Arabia raised the price of its Arab Light grade loading for Asia in November by $0.90 per barrel to a premium of $2.20 a barrel above the Dubai/Oman benchmark. The Dubai/Oman quotes are the benchmark against which Middle Eastern producers price their supply to Asia.
Despite the price hike for the November-loading cargoes, Saudi and other Middle Eastern supply has become more competitive in Asia in recent weeks compared to grades priced off the Brent benchmark, including Russia’s Urals and crude from West Africa.
By Tsvetana Paraskova for Oilprice.com
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