Saudi Arabia, the world’s biggest exporter of crude, said it will more than double its gasoline imports this month, three sources privy to information said.
The traders, on condition of anonymity, disclosed to Bloomberg that state-owned oil company Saudi Aramco will buy around 10 cargoes of mostly 95-RON (Research Octane Number) quality gasoline for delivery each month in April and May. Dhahran-based oil company has purchased about four cargoes a month on average in Q1 this year, they added. A company spokesman declined to comment when contacted.
Gulf crude producers lack adequate refining capacity to meet domestic demand and, as a result, import products such as gasoline and diesel. The kingdom’s largest oil refinery Ras Tanura, which refines 550,000 barrel-a-day of gasoline, was closed in March for about 45 days for maintenance work, leading to a significant decrease in Saudi gasoline production.
The traders insisted that Aramco is paying premiums of at least US$30 a metric ton more than Mediterranean benchmark prices for its planned imports, which will include some 92-RON quality fuel. Most of the shipments will arrive at ports on Saudi Arabia’s Red Sea coast, they added.
One of the traders explained that a single cargo of gasoline generally contains about 30,000 tons, or 255,000 barrels, of fuel which means Aramco will be importing as much as 2.26m barrels each month, or roughly 80,000 bpd, in April and May.
The Saudi state-run corporation would be seeking additional supply for delivery from June and might buy more than 10 cargoes a month during the Saudi summer months, another trader revealed.
According to a report released by HSBC Holdings last month, Saudi Arabia consumed about 500,000 bpd of gasoline in 2010. John Tottie, an HSBC analyst, noted in the report that demand for the transportation fuel is growing about 6% a year.