DUBAI: The world’s largest oil exporter, Saudi Arabia, has begun issuing a new price for sales to Mediterranean refiners as it seeks to standardise prices to both north and south Europe, a Saudi Aramco source said yesterday.
State-run Aramco has posted a loading price for crude at the world’s largest offshore oil export terminal at Ras Tanura for Mediterranean buyers since September. Buyers in northwest Europe also have crude priced from Ras Tanura.
Previously, the price posted for Mediterranean buyers was for loading Saudi oil from the Egyptian port of Sidi Kerir, the terminal for the Sumed pipeline from the Red Sea.
The Sidi Kerir price takes into account the cost of shipping oil from Saudi Arabia through the pipeline, which bypasses the Suez Canal. The canal is too small to take the largest crude carriers.
Buyers did not always agree that the difference between and Sidi Kerir and Ras Tanura prices reflected shipping costs and the differences between the Mediterranean and northwest European markets.
“We recognised that there were some differentials between the prices to Mediterranean and northwest European customers,” an Aramco source said. “With those differentials you won’t always satisfy both customers in both locations, so we have issued separate prices (from Ras Tanura).”
Aramco has long had bilateral deals with some customers in the Mediterranean using free on board (fob) Ras Tanura prices, but simply has not posted the price before, one source at a company that buys Saudi crude said.
“They have just formalised the process,” he said. “Previously, if you were taking the oil to the Med for instance, you didn’t get the full benefit of the freight escalation that you would have if you were taking it to northwest Europe.”
Aramco continues to list prices from Sidi Kerir, the Aramco source said. It also lists prices for oil delivered to tanks in the northwest European refining hub of Rotterdam. – Reuters |
