Saudi staycations boost Fujairah’s gasoline exports, Iraq also buys
Saudis staying home for vacation because of the COVID-19 pandemic are helping to boost demand for gasoline in Fujairah, where motor fuel exports jumped to a two-year high in July, according to cargo-tracking company Kpler.
Gasoline exports from the UAE’s east coast port averaged 192,000 b/d in July, the most since May 2018, Kpler data show. Shipments to Saudi Arabia hit a three-year high in June at 50,000 b/d and were still at 30,000 b/d in July. Pakistan, Iraq and South Africa were also big buyers in July.
Aramco Trading Co. (ATC), the Saudi Aramco subsidiary with offices in Fujairah, “needs to import to cover seasonal gasoline demand which has been higher than usual, owing to the fact that, because of COVID-19 restrictions, many Saudi Arabian residents are unable to make their annual travel out of the region over the hot summer months,” Kevin Wright, lead Asia Pacific analyst in Singapore at Kpler, told S&P Global Platts. “ATC has sourced barrels from Fujairah to cover their demand. Iraq has also seen higher imports of gasoline drawn from traders’ Fujairah inventories.”
Road traffic in Riyadh was above pre-COVID-19 levels for all of July for the first time since the coronavirus hit, although it has since dipped below in the early days of August, according to Apple mobility data. Aramco wasn’t available for comment.
Pakistan is known to import motor fuel from Fujairah, with purchases at 69,000 b/d in July, from a two-year high of 73,000 b/d in June, the Kpler data showed. Iraq purchased 18,000 b/d in July after a record 39,000 b/d in June. South Africa also bought 11,000 b/d in July, the first gasoline purchase since September 2018 and matching the record set in February of that year.
With the Singapore and Arab Gulf gasoline markets strengthening, the incentive to draw product from storage has grown, Wright said. “The contango no longer covers the cost of carry,” he said.
Pakistan State Oil Co. has been tendering for gasoline for delivery in August and September, with 220,000 mt purchased from ENOC, MAX Energy and Energin.
Fujairah’s middle distillate imports in July rose to a three-month high of 81,000 b/d, led by gasoil, diesel and jet fuel. Iraq, Pakistan and Yemen were large buyers of gasoil/diesel from Fujairah. Exports of jet fuel were zero for the first time since February 2019. Crude exports climbed for the first time in four months, averaging 768,000 b/d in July from 672,000 b/d in June, according to Kpler.