Saudis offer extra oil to Asian buyers

Evidence is mounting that Saudi Arabia is heeding US President Donald Trump’s call for the Organization of the Petroleum Exporting Countries (Opec) to keep the oil market amply supplied and rein in prices.

The Middle East kingdom is offering extra crude volumes on top of its contractual supplies to some buyers in Asia, according to people with knowledge of the matter, as the Opec’s defacto leader plans record oil output after unwinding a deal with its allies to curb output. The Opec has come under pressure from Trump to pump more before the US midterm elections in November, after a rally in crude to a 2014 high lifted American gasoline prices. Meanwhile, some Saudi customers such as India have warned that higher prices will curb demand. In China, Unipec — the trading unit of the nation’s biggest refiner — had cut purchases citing costly pricing by the kingdom.

Saudi Arabian Oil has pitched additional cargoes of its Arab Extra Light crude to at least two buyers in Asia for August, according to people with knowledge of the matter who asked not to be identified because the information is private. That’s beyond monthly contractual volumes from the state—run producer known as Saudi Aramco. The company’s press office declined to comment. One of the Asian processors that received the offer for Arab Extra Light grade has taken the additional supplies, one of the people said, without giving details about the volume.

Saudi Arabia is making the offer at a time when investors are watching for any signs that it will step in to fill any potential supply gap caused by renewed US sanctions on Iran, falling output in Venezuela and disruptions in Libya. The nation and Russia last month persuaded OPEC and its allies to boost output after 18 months of production curbs succeeded in shrinking a global glut and boosting prices to levels last seen in 2014.