Saudi Arabia is flooding Europe with oil, five trading sources said on Friday.
The sources from oil majors and refiners which process crude in Europe; said Saudi state oil company Aramco told them it would supply all requested additional volumes in April.
Oil prices halved since the start of the year because demand has been hit by the coronavirus outbreak. Not to mention, Russia and OPEC failed to reach a new deal on supply cuts.
Moscow refused to support new deeper cuts. Riyadh also retaliated by opening its taps and pledging to pump record volumes on to the market.
Saudi Arabia has made a deep cut to its official selling prices for oil. Traders mentioned offering Arab Light and Arab Medium barrels at selling price of $25-28 per barrel on CIF Rotterdam basis.
Russia’s main blend Urals has been offered slightly higher that $30 per barrel on CIF Rotterdam basis, according to Refinitiv Eikon data.
“We are happy with our allocation. Confirming requests for April, I look forward to May if prices remain that attractive”, a trader with a European oil company involved in the talks told Reuters.
European oil refiners including Total, BP, Eni and SOCAR have all had allocations for additional Saudi crude oil supplies in April confirmed, the sources said.
Saudi Aramco also declined to comment. Total, BP, Eni and SOCAR did not immediately respond to Reuters requests for comment.
On Thursday, sources told Reuters Saudi Arabia started focusing on boosting supplies to traditional buyers of Urals. This also comes as it is trying to replace Russian oil in refiners’ feedstock around the world, from Europe to India.
Brent crude was on track for its worst week since the 2008 financial crisis on Friday as investors fretted over the impact of the virus on demand.