SEATTLE (Scrap Monster): Saudi Arabia imported fuel oil from Kuwait for the first time in more than two years in July to help meet peak summer power demand while discounted supplies from Russia fell, according to trade sources and shipping data.
Imports of Kuwaiti high sulphur fuel oil (HSFO) exceeded 180,000 metric tons (about 37,000 barrels per day), data from shipping analytics firms Kpler and Vortexa showed, the kingdom's first fuel purchase from Kuwait since May 2022.
Saudi demand is keeping more Kuwaiti supply in the Middle East, supporting benchmark prices in Singapore amid an overall decline in Middle Eastern exports.
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, trade sources said.
The cargo, scheduled to load on Aug. 11-12, traded at a discount of about $8 to Singapore VLSFO quotes on a free-on-board Kuwait basis, they added.
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. But they were down from nearly 750,000 tons in the same month last year.
Saudi Arabia imported record volumes of discounted Russian fuel oil in June 2023 to meet summer demand, while exporting its own production at higher prices.
Competition from China and India for Russian HSFO prompted Saudi Arabia to turn to alternative suppliers such as Kuwait, said Emril Jamil, a senior analyst at LSEG Oil Research.
Aramco declined to comment. The Saudi government communications office did not immediately return a request for comment. KPC and its subsidiary KIPIC did not immediately respond to a request for comment.
FGE's Middle East oil analyst Palash Jain said refinery maintenance at the SASREF refinery in April to June may have also limited the kingdom's ability to increase fuel oil stocks ahead of summer.
Kuwait has surplus HSFO to export as its power plants have switched to burning LSFO since last year, he added.
Courtesy: www.reuters.com