Saudi Arabia Turns Kuwait For Fuel Oil To Meet Summer Demands (image@Vortexa)
Saudi Arabia imported oil from Kuwait this month for the first time in more than two years. The move is to help meet peak summer power demand while discounted supplies from Russia fell, said shipping data. Data from shipping analytics firms Kpler and Vortexa showed that imports of Kuwaiti high sulphur fuel oil (HSFO) exceeded 180,000 metric tons (about 37,000 barrels per day).
The firm showed that Riyadh’s first fuel purchase from Kuwait was in 2022. The Saudi demand is keeping more Kuwait supply in the Middle East, supporting benchmark prices in Singapore, amidst the overall decline in Middle Eastern exports.
According to Reuters, the trade flow is likely to continue in August as Aramco Trading also won a recent tender for 130,000 tons of very low sulphur fuel oil (VLSFO) from Kuwait’s Al Zour refinery. It is also said that the cargo, which is scheduled to load on August 11-12, traded at a discount of about $8 to Singapore VLSFO quotes on a free-on-board Kuwait basis.
Read also: Kuwait: Minister Of Education Refers Forged Certificates To Public Prosecutor
Russian supplies still account for the bulk of Saudi Arabia’s fuel oil imports, reaching about 441,000 tons in July and making up about 30% of total volumes. However, they were down from nearly 750,000 tons in the same month last year. The country imported record volumes of discounted Russian fuel oil in June last year in order to meet the summer demand, while exporting their own products at higher prices.
The high competition from China and India has prompted Saudi to turn to alternative suppliers like Kuwait, said Emril Jamil, a senior analyst at LSEG Oil Research, as quoted by Reuters. Kuwait has surplus HSFO to export, as the country’s power plants have turned to burning LSFO since last year, Jamil further added.
Read also: Indian Embassy In Kuwait Deletes X Post After Backlash Over Officials Posing With Coffins
The Saudi government communications office and Aramco did not immediately respond to Reuters request for comment.
