Saudi Aramco sells its first cargo of West Texas Light crude to South Korea

[Tom Kirkman + 8,860]

I receive regular oil & gas updates via WhatsApp from one of my LinkedIn connections, Randall Mohammed.

Randall wrote this yesterday, and so far, neither of us are able to make heads or tails of Saudi Aramco's intentions in adding more WTL to the global oil glut, while OPEC hems and haws about cutting production.

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Saudi Aramco sells its first cargo of West Texas Light crude to South Korea. Via its Motiva owned refinery in Texas, Aramco has traded 1MM bbls of WTL to its trading arm for reselling into the international market. 

- how does sanctions on Iran boost US crude sales. The cargo of WTL replaces crude from Iran which South Korea refiners have imported previous to the sanctions. 

- the deal fits with the US objectives to become the number one exporter of crude oil. It's forecasted that the US could be exporting 6MM bpd to rival Saudi at just under 7MM bpd. 

- does the export of WTL conflict with Saudi and by extension OPEC's strategy to increase market share. It certainly does as OPEC members cut production with a 159% compliance meaning deeper cuts lead by Saudi. 

- does the export of WTL conflict with OPEC's strategy to boost prices by cutting production. Oil prices reflect that there's no shortage of oil on the market as US production reaches a record high of 12.3MM bpd. By exporting US crude Saudi is facilitating the oversupply by putting more crude on the market. 

- my forecast is that US crude would be favoured by refiners because of its light sweet characteristics as the world demands cleaner fuels with less sulphur. 

Randall Mohammed

[GeoSciGuy + 74]

Saudi Arabia’s intensions make complete and total sense.  

Aramco’s strategy is essentially ‘If you can’t beat them, join them’.  

It’s a strategy that works well for any IOC.  There are countries with mandated cuts and countries without mandated cuts.  Produce as much as legally allowed in countries with cuts and produce as much as physically possible in countries without cuts.

Edited August 30, 2019 by GeoSciGuy

[ceo_energemsier + 1,818]

19 hours ago, Tom Kirkman said:

I receive regular oil & gas updates via WhatsApp from one of my LinkedIn connections, Randall Mohammed.

Randall wrote this yesterday, and so far, neither of us are able to make heads or tails of Saudi Aramco's intentions in adding more WTL to the global oil glut, while OPEC hems and haws about cutting production.

=============================

Saudi Aramco sells its first cargo of West Texas Light crude to South Korea. Via its Motiva owned refinery in Texas, Aramco has traded 1MM bbls of WTL to its trading arm for reselling into the international market. 

- how does sanctions on Iran boost US crude sales. The cargo of WTL replaces crude from Iran which South Korea refiners have imported previous to the sanctions. 

- the deal fits with the US objectives to become the number one exporter of crude oil. It's forecasted that the US could be exporting 6MM bpd to rival Saudi at just under 7MM bpd. 

- does the export of WTL conflict with Saudi and by extension OPEC's strategy to increase market share. It certainly does as OPEC members cut production with a 159% compliance meaning deeper cuts lead by Saudi. 

- does the export of WTL conflict with OPEC's strategy to boost prices by cutting production. Oil prices reflect that there's no shortage of oil on the market as US production reaches a record high of 12.3MM bpd. By exporting US crude Saudi is facilitating the oversupply by putting more crude on the market. 

- my forecast is that US crude would be favoured by refiners because of its light sweet characteristics as the world demands cleaner fuels with less sulphur. 

Randall Mohammed

 

 

ARAMCO trading is doing just that, trading third party crude.

Good for the US producers and with their marketing expertise and experience and network, they will be able to boost US crude exports more to a wider range of buyers.