Many Asian refiners have requested smaller amounts of oil from Saudi Arabia for September as the COVID-19 pandemic continues to hurt demand after fears about the Delta variant.
At least four customers – three in Northeast Asia and one in Southeast Asia – have asked for volumes lower than their contracted supplies for September, Bloomberg reported.
State-run Saudi Aramco has notified companies that it will provide the quantities that the companies have requested, the report said.
Moneycontrol could not independently verify the story.
Aramco declined to comment when contacted by Bloomberg.
The delta variant of SARS-CoV-2 continues to be a cause for concern across the world, even in countries with higher rates of vaccination. Many Asian countries are enforcing COVID-induced restrictions, which will adversely impact demand for crude oil.
In China, authorities have ramped up containment measures to curb the spread of infections. China Petroleum & Chemical Corp., will reduce run rates at some plants by 5 percent to 10 percent this month from July, Bloomberg reported citing commodities researcher ICIS-China.
The report also said that Asian countries are hurt by a surge in crude oil prices, at a time when their complex refining margins are lower than their five-year average. Aramco has raised the cost of Arab Light and Arab Medium crudes to the highest since February 2020.
Source: Moneycontrol