NO EXPORTS FROM THE GULF
Nasser noted that global inventories of oil were at a five-year low and said the crisis will lead to drawdowns at a faster rate, adding that it was critical that shipping in the strait resumed.
“Unfortunately, for global markets, most of the spare capacity is in this region,” Nasser told analysts on a call, noting that incremental demand throughout the year will keep the market tightly balanced.
At present, Aramco is not exporting oil from the Gulf as ships cannot load cargoes there. But the company, which does not disclose its exact crude output, is meeting the majority of its customers’ needs, he said, partly by tapping into global inventories.
“Now, that cannot be used – that inventory – for an extended period of time, but for the time being, we are capitalising on it,” he said.
The East-West pipeline is, meanwhile, being used to transport mostly Arab Light and some Arab Extra Light crude grades to the Red Sea port of Yanbu.
The pipeline, which has more than doubled its initial capacity, is expected to reach its full capacity of 7 million barrels per day in the next couple of days as customers re-route, Nasser said.
“Even with our ability to export through the western region, you’re talking about close to 350 million barrels of disruptions that will come off the market,” he said.
In addition to the pipeline, Aramco is also able to direct crude towards domestic demand, he noted. Close to 2 million bpd of the pipeline’s 7 million bpd capacity is going to western domestic refineries, which are net exporters of products, Nasser added.
A small fire from an attack last week on Aramco’s Ras Tanura refinery, its largest domestically, was quickly extinguished and brought under control, Nasser said, adding that the refinery was in the process of being restarted.
Aramco reported a 12 per cent drop in annual profit on Tuesday mainly due to lower crude prices. It also announced it would repurchase up to US$3 billion worth of shares in its first-ever buyback.
