Saudi Aramco has told at least seven customers in Asia they will receive full contract volumes of crude oil in November ahead of the peak winter season, several sources with knowledge of the matter said on Monday.
The producer is keeping supplies to Asia steady despite likely production cuts by tapping on inventories, the sources said.
Saudi Aramco could not be immediately reached for comment outside office hours.
The full supply allocation comes despite a decision by the Organization of the Petroleum Exporting Countries and allies including Russia, known as OPEC+, to lower their output target by 2 million barrels per day.
Saudi Energy Minister Abdulaziz bin Salman had said the real supply cut would be about 1 million to 1.1 million bpd. Analysts expect Saudi Arabia, the United Arab Emirates and Kuwait to shoulder much of the production cuts because other OPEC+ members are falling behind output targets.
Consultancy FGE expects the Saudi oil production target to fall by around 550,000 bpd in November from the previous month.
The world’s top exporter has also kept November crude prices for Asia largely unchanged against expectations of higher prices as it seeks to maintain market share in the region.
The move took traders by surprise as the world’s top exporter had been expected to track gains in Middle East price benchmarks last month.
— Giovanni Staunovo🛢 (@staunovo) October 10, 2022
The November OSP for Arab Light to Asia was set at a premium of $5.85 a barrel to the Oman/Dubai average.
The producer also kept the November OSP for Super Light crude unchanged while trimming the price for Arab Extra Light crude by 10 cents.
It raised prices for Arab Medium and Arab Heavy crude in November by 25 cents from the previous month.
Saudi Arabia lowered its Arab Light OSP to northwest Europe to $0.90 a barrel against ICE Brent for November, while raising it to the United States to $6.35 versus ASCI.
Reuters with additional input by GVS News Desk