iran sanctions increase saudi oil sales
Last Updated : GMT 02:57:24
Arab Today, arab today
Arab Today, arab today

Iran sanctions increase Saudi oil sales

Arab Today, arab today

Arab Today, arab today Iran sanctions increase Saudi oil sales

Riyadh - Agencies

Saudi Arabia is preparing to extend this year\'s unexpected jump in oil sales to the United States, adding to speculation about the response of the world\'s top oil exporter to sanctions against Iran and a rally in prices. The kingdom\'s shipments to the United States have quietly risen 25 percent to the highest level since mid-2008, according to preliminary U.S. government data, a sizeable leap that appears at least partly related to the imminent completion of a major expansion at its joint-venture Motiva refinery in Texas. But some say the scale of the increase, plus other U.S. data showing Gulf Coast inventories are still subdued, suggest the potential for a political dimension as well, evoking comparisons to 2008 when the OPEC kingpin was driving up production to knock oil prices off record highs near $150 a barrel. The surge appears set to continue. Vela, Saudi Arabia\'s state oil tanker company, has booked at least nine very large crude carriers (VLCCs) capable of carrying 2 million barrels of crude each from the Middle East Gulf to the U.S. Gulf since the start of March, the biggest such wave of fixtures in years, analysts say. The pivot to the U.S. market, which bore the brunt of Saudi output curbs after 2008, is a surprise for two reasons. For one, many analysts had believed that the kingdom\'s modest output increase in recent months was bound for fast-growing Asian markets, particularly given the pressure on refiners there to reduce their imports from Iran. Plus, it comes after a year in which U.S. crude oil imports shrank to their lowest since 1999 thanks to a dramatic boom in shale oil production and tepid demand from consumers who are making every effort to cut back as gasoline prices rise. The White House has been scrambling for options to bring down gasoline prices -- at a seasonal record high -- during an election year, after concerns over an Iranian supply disruption launched benchmark Brent crude to lofty peaks over $120 a barrel not seen since the record price run of 2008. Washington has urged ally Saudi Arabia to cover potential shortages when new U.S. and European Union sanctions are expected to reduce Iranian oil exports from July. The Obama administration has considered releasing strategic oil inventories, potentially as part of a bilateral deal with Britain. The kingdom has stepped up efforts this week to assure edgy markets that it will make up for any oil supply disruptions at a time when Iran\'s standoff with the West has begun to intensify. \"Beyond the expansion at Motiva, there has been a major public shift by the Saudis since the Iran tensions started to raise the price of oil,\" said Amy Jaffe, an energy policy expert at Rice University\'s Baker Institute in Houston. \"Saudi Arabia and the United States are trying to show the Iranians they (the Iranians) will have little flexibility, and they shouldn\'t count on the world needing all the oil that Iran produces.\" Saudi output in February was up 450,000 barrels per day (bpd) from October at its highest since August. RISE IS SURPRISE The build appears related, at least in part, to a massive expansion project at Saudi Arabia\'s 285,000-bpd Motiva Port Arthur, Texas joint-venture refinery with Shell Oil, the U.S. unit of Royal Dutch Shell. All expansion units are expected to be in production by the end of the second quarter of this year, with the expanded refinery reaching, by the end of the year, a maximum capacity of 660,000 bpd. Motiva Enterprises began circulating feedstocks through some of the expansion units in January Motiva declined to comment. The expansion project, budgeted at $5 billion, began in 2007, and when complete will make the refinery the largest in the United States. \"I suspect there is some seasonality to it, U.S. refiners build inventories in the first quarter and U.S. refiners start up Gulf Coast plants out of maintenance,\" said Jan Stuart, head of energy research at Credit Suisse in New York City. \"In addition, this year you have the Motiva expansion, which will buy a lot of crude,\" he said, adding the building up of 20 days worth of inventory could account for part of the increased Saudi shipments. That would be equivalent to building up inventories of 7.5 million barrels, by a Reuters calculation, implying a need to build 100,000 bpd of stock over the first 10 weeks of the year. INVENTORY BUILD Still, crude inventories in the Gulf Coast region have not grown as much as they traditionally do during the first quarter when refiners build up stocks. Gulf Coast stocks have risen by only 10.3 million barrels -- or roughly 140,000 bpd -- over the 10 week period, compared with 14.2 million barrels on average for the past five years, according to EIA data. The weekly data is preliminary, and more comprehensive monthly data for January is not yet available. While the rise in Saudi output has been well charted, the fact that the lion\'s share of it appears destined for U.S. refiners will come as a surprise to many. Overall U.S. demand for foreign crude has ebbed this year as a boom in domestic and Canadian production reduces the need for imports. The reversal of the key Seaway pipeline -- which will begin running from Oklahoma to Texas by July -- was expected further to temper demand for imports by helping bring more cheap crude from the Midwest to the U.S. Gulf Coast refining hub. \"We were all expecting to see U.S. imports fall for Vela, so it\'s a jump at a time when we are preparing for a reversal given the Seaway pipeline,\" one shipping source said. \"It raises the question why would they need more imports?\" Omar Nokta, managing director with investment bank Dahlman Rose & Co, said in a note on Friday that it was the first time in \"several years\" for Vela to book so many tankers in such a short time. RISE BEGAN IN JANUARY Provisional weekly data from the U.S. Energy Information Administration shows that the rise in supplies began several months ago, and outpaced gains to other consumers such as China. U.S. imports of Saudi oil hit 1.5 million bpd in the first 10 weeks of 2012, up 300,000 bpd from the fourth quarter of 2011 and marking the largest rise in shipments since the second quarter of 2003. Saudi shipments to China in January rose only 14 percent from the year before. Total U.S. crude imports are up only 165,000 bpd in the first 10 weeks of the year versus the fourth quarter. The EIA was not immediately able to respond to requests for an explanation of the data. The shift also could simply be the result of restoring supplies to U.S. customers whose shipments had been cut much more deeply after prices crashed four years ago. \"Up to 2008, there was definitely a much larger rise in shipments to Asia, that\'s where the demand was growing. The cuts that followed that were not proportionate,\" said a senior executive at a major Saudi oil customer. \"Now there\'s a degree of rebalancing.\" The rise in bookings to the U.S. Gulf has also tightened tanker availabilities, helping push the average earnings for VLCCs on the benchmark Middle Gulf to Japan route -- the major market barometer -- to their highest level in over a year to $33,205 a day, Baltic Exchange data showed. Data shows that the Saudi crude has been priced advantageously for U.S. buyers. Official selling prices (OSPs) for U.S. buyers, which are set by the state oil firm Saudi Aramco, have fallen to a deep discount versus Asian and European refiners, according to Reuters data. The bargain rates may have encouraged a bit more crude to move West, although industry sources say the kingdom\'s largest customers with global refining systems have less flexibility to shift supplies between different regions than they have in the past. Edward Morse, global head of commodities research at Citigroup, said that while the higher U.S. volumes could be due to Motiva, it may come as part of efforts to build up global inventories. \"I think that if you look over a longer term, the Saudis are increasing their exports to the whole world right now and not just the U.S.,\" Morse said. \"The Saudis are getting oil onto the market to encourage inventory building, and to show their customers they can deliver whatever is needed.\"

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

iran sanctions increase saudi oil sales iran sanctions increase saudi oil sales

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

iran sanctions increase saudi oil sales iran sanctions increase saudi oil sales

 



Arab Today, arab today
Arab Today, arab today Jordanian woman reveals her project

GMT 00:46 2017 Saturday ,11 November

Jordanian woman reveals her project
Arab Today, arab today Banyan Tree Phuket Takes Festive Season

GMT 01:34 2017 Friday ,17 November

Banyan Tree Phuket Takes Festive Season
Arab Today, arab today Keep kids busy at Thanksgiving gatherings

GMT 11:14 2017 Friday ,10 November

Keep kids busy at Thanksgiving gatherings
Arab Today, arab today Israel ready to cooperate with Saudi

GMT 06:31 2017 Friday ,17 November

Israel ready to cooperate with Saudi
Arab Today, arab today Airbnb raided by Japan

GMT 01:55 2017 Saturday ,18 November

Airbnb raided by Japan
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Australian academic's book pulled

GMT 15:20 2017 Monday ,13 November

Australian academic's book pulled
Arab Today, arab today May under Brexit pressure at EU reform summit

GMT 02:14 2017 Saturday ,18 November

May under Brexit pressure at EU reform summit
Arab Today, arab today paObama climate envoy slams Trump's rejection

GMT 16:04 2017 Friday ,17 November

paObama climate envoy slams Trump's rejection
Arab Today, arab today The history of solar eclipses

GMT 05:16 2017 Sunday ,20 August

The history of solar eclipses
Arab Today, arab today Baidu speeds up AI progress

GMT 11:46 2017 Friday ,17 November

Baidu speeds up AI progress
Arab Today, arab today Urban, young and active?

GMT 11:01 2017 Thursday ,16 November

Urban, young and active?
Arab Today, arab today Ayten Amer happy for “The Flood” success

GMT 08:06 2017 Wednesday ,15 November

Ayten Amer happy for “The Flood” success
Arab Today, arab today Unloved vultures fight for their survival

GMT 11:38 2017 Wednesday ,15 November

Unloved vultures fight for their survival

GMT 08:21 2017 Tuesday ,14 November

Nelly Karim focuses on humanitarian roles

GMT 11:15 2017 Thursday ,16 November

Angola oil boss sacked by father's protege

GMT 18:41 2017 Friday ,20 October

Designer Aql Faqih aspires to innovation

GMT 13:40 2017 Monday ,13 November

Pollution spikes in Delhi amid warnings

GMT 11:49 2017 Thursday ,17 August

Egyptian artist presents new collection of designs

GMT 06:13 2017 Friday ,17 November

Pope denounces healthcare inequality

GMT 01:04 2017 Wednesday ,15 November

In Morocco, a blue tourist town

GMT 17:12 2017 Monday ,07 August

Al-Shawaifi reveals secrets of total solar eclipse

GMT 16:53 2017 Tuesday ,05 September

Youssra depended on colored foam
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday