Saudi allocates full volumes to most Asia refiners, unwinding voluntary production cuts

London (Quantum Commodity Intelligence) Saudi Aramco is set to mostly supply full term nominations in June for customers in Asia, according to sources.

The move reaffirms confidence that Asian demand will be back on track for the summer months, following a demand slowdown in parts of Asia due to the COVID-19 surge in during Q2.  

India's state-owned refiners had already requested increased volumes for June, according to media reports, despite the recent demand slump due to the number of coronavirus cases sweeping the country.

Full allocations were largely expected as Saudi Arabia has started to unwind the additional voluntary 1mn b/d cut it has implemented since February. Aramco is expected to increase production by 250,000 b/d in May, 350,000 b/d in June and 400,000 b/d in July.

Saudi Aramco has reduced Official Selling Prices (OSPs) for June crude oil sold to Asia. Differentials for the flagship Arab Light grade were reduced by $0.10/barrel to +$1.70/b, while Arab Medium was cut by $0.20/b to +$1.25/b.