Asia demand for Saudi oil holds steady despite price cuts

Chinese and other Asian refiners only asked for similar volumes of Saudi crude oil for February compared with January, people with knowledge of the matter said on Thursday, after the world’s top oil exporter cut its prices by the most in 13 months.

Price cuts would typically draw higher demand, but some of the multiple sources said refineries had already completed purchases for February-loading cargoes and planned their production runs, leaving little room to lift more Saudi oil.

State oil company Saudi Aramco on Sunday cut the official selling price (OSP) for February-loading Arab Light to Asia by $2 a barrel from January to $1.50 a barrel over Oman/Dubai quotes.

Chinese refiners nominated about 38.5 million barrels (1.33 million bpd) of Saudi crude for February-loading, similar to the about 40 million barrels for January on a daily basis, trading sources said.

Indian Oil Corp IOC.NS, which had planned to ask for an extra 1 million barrels of Saudi crude, did not do so following feedback from its refineries division, a company source said.

Another state refiner, Bharat Petroleum Corp BPCL.NS, received the extra 1 million barrels it requested for, a company source said.

All the sources spoke on condition of anonymity because they were not authorised to speak publicly.

IOC, BPCL and Saudi Aramco did not immediately respond to requests for comments.

Saudi oil prices were about $2 a barrel more expensive than crude supplied by other regional producers last month, prompting refiners to seek fewer term-cargoes from Saudi Arabia and to buy cheaper alternatives from the spot market.

Aramco has notified at least five North Asian buyers that it will supply full contractual volumes in February. The de facto leader of the OPEC+ group committed to extend its voluntary output cut into the first quarter of 2024.
Source: Reuters (Reporting by Muyu Xu in Singapore and Nidhi Verma in New Delhi; Editing by Jane Merriman and Barbara Lewis)