Saudi to supply full term volumes to Asia, turns down requests for extra cargoes

Quantum Commodity Intelligence - Saudi Aramco is set to supply full contractual volumes in August for customers in Asia, according to a Reuters report Monday referencing refining sources.

However, the Saudi producer was reported to have turned down requests from customers for additional volumes, said the report, which echoed Quantum reports that suggested the UAE had turned down similar requests last week.

Full allocations were expected as Saudi Arabia fully unwinds the additional voluntary 1 million bpd cut it implemented between February and April. Aramco was expected to increase production by 250,000 b/d in May, 350,000 b/d in June and 400,000 b/d in July.

The request for additional cargoes comes as the OPEC+ proposal to hike production by 400,000 bpd in August remains at an impasse over a dispute on baseline production levels.

Abu Dhabi has requested that its baseline production is increased to reflect the country's higher production capacity.  

Last week, Quantum reported that ADNOC had also turned down requests for additional cargoes next month.

Informal talks aimed at breaking the impasse between Saudi Arabia and UAE on production  are expected to continue this week, but so far there have been no reports of progress over the weekend.

A week-long holiday starts in the Middle East on July 19, which effectively means a breakthrough would be needed before that date to ratify the proposed 400,000 bpd OPEC+ increase in August.

Without additional OPEC+ barrels, refiners are increasingly concerned that spot supplies will tighten during the second half of the year.