Saudi Arabia imported fuel oil from Kuwait in July for the first time in more than two years in a rare move to meet the growing demand for electricity in the summer, trade sources and shipping data said.
The data also showed, according to Reuters, a decline in discounted fuel oil supplies from Russia to the Kingdom.
Data from Kpler and Vortexa, a shipping data analysis company, showed that the Kingdom’s imports of high-sulfur fuel oil from Kuwait exceeded 180,000 tons (equivalent to approximately 37,000 barrels per day), and this is the first fuel purchase carried out by Saudi Arabia from Kuwait since May 2022. .
Saudi demand keeps more Kuwaiti supplies inside the Middle East, which supported record prices in Singapore in light of a general decline in exports from the Middle East.
This flow is likely to continue into August, trade sources said, as Saudi Aramco's trading arm recently won a bid for 130,000 tons of ultra-low sulfur fuel oil from Kuwait's Al-Zour refinery.
The sources added that the shipment, scheduled to be loaded between August 11 and 12, was sold at a discount of about eight dollars from the prices offered for extremely low sulfur fuel oil in Singapore on a FOB basis in Kuwait.
Russian supplies are still the largest in Saudi Arabia’s imports of fuel oil, reaching about 441,000 tons in July, constituting about 30 percent of the total quantities.
But it decreased by about 750 thousand tons compared to the same month last year.
Saudi Arabia purchased unprecedented quantities of discounted Russian fuel oil in June 2023 to meet summer demand while exporting its production at higher prices.
Imril Jamil, a senior oil research analyst at the London Stock Exchange Group, said that competition from China and India for high-sulfur Russian fuel oil has prompted Saudi Arabia to turn to alternative sources such as Kuwait.
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