Saudi Aramco Petroleum Products Trading Company (Aramco Trading) has entered into a new agreement to secure long-term crude oil supplies from the state-run Kuwait Petroleum Corporation that can be processed at Aramco-owned refineries. Saudi Arabia in Asia.
According to ArabiaNet, three informed sources said that Aramco for Trade signed the first contract for Kuwaiti export crude with the Corporation this year. Aramco Trading is the commercial arm of the state-owned Saudi Aramco, the world's largest oil export company.
A source said that Aramco Trading will determine the volume of purchases every month. Aramco and KPC declined to comment.
The contract for the supply of Kuwaiti crude comes alongside two annual deals concluded by Aramco for trade late last year to purchase naphtha from Italy and Greece in 2020.
The sources stated that the deals allow Aramco Trade to expand the sources of supply globally from outside the Kingdom to secure values for the refining and petrochemical activities that Aramco is expanding in Asia after the attack in September that led to the disruption of production facilities and forced refineries to reduce production.
After the attack, Aramco was forced to search for shipments in the spot market, which led to price hikes. The contracts also boost the amount of oil that Aramco is trading and gives it direct control of destinations where excess naphtha can be converted when prices are favorable, according to sources.
Saudi Arabia's naphtha exports fell 14.6% in 2019, compared to a year earlier to 5.8 million tons, according to Judy data. The company says on its website that it can export up to ten million tons of naphtha annually.
Saudi Aramco owns stakes in refining and petrochemical projects in two locations in China, one in Japan and one in Malaysia, and holds a majority stake in the S-Oil Corp in South Korea, according to the company’s website.
