Saudi Arabia’s diesel exports climb to record, with Aramco active trader

Saudi Arabia's diesel exports for July set a record high, with Saudi Aramco offering its first cargo of the fuel in the Northwest European Platts Market on Close assessment process July 28.

Aramco Trading offered 27,000 mt of UK summer specification diesel into the UK's Thames for delivery over Aug. 7-11 during the Northwest European MOC, according to data compiled by Platts, part of S&P Global Energy.

Aramco has become increasingly active in the MOC since March, when it began regularly offering cargoes into the Mediterranean market, often at lower prices than those of other traders. In recent weeks, Aramco has been the sole supplier participating in the assessment process.

Saudi Arabia's diesel exports are averaging 611,000 b/d this month -- the most since at least April 2017, and up from 494,000 b/d in June -- according to Kpler. The previous all-time high was 588,000 b/d in June 2023. In July, Aramco has sold 255,000 b/d, up from 191,000 b/d in June, and approaching its all-time high of 274,000 b/d set in April.

Aramco did not immediately respond to a request for comment.

Diesel and gasoil inventories at the Amsterdam-Rotterdam-Antwerp hub fell to an 18-month low of 1.752 million mt on July 24, down 12% from a year earlier, according to Insights Global data. The CIF Mediterranean ULSD cargo differential to ICE LSGO futures jumped to $57/mt on July 10, the highest since November 2022, just two days after reaching minus $15.75/mt on July 8. On July 28, it was $10.75/mt.

Platts assessed the CIF Mediterranean diesel cargo at $719.50/mt on July 28, after it reached $826/mt on June 19, matching the highest level since April 2024.

"Med is still not well supplied; we do not have enough resupply from the local market yet because domestic demand is performing," a Mediterranean diesel trader said. "So now it is all dependent on the arbitrage cargoes [that] were supposed to come in August, and now we [will] see what happens to them."

Aramco's July 28 offer helped to push down the Northwest European ULSD cargo differential to LSGO futures by $1.75/mt from the previous session to $22.25/mt, according to Platts data.

Traders said the EU's July 18 announcement banning imports of refined products made from Russian crude may exacerbate the short supply just around the corner from a seasonal pickup in demand in winter.

"Eventually, it will impact European inflation," a European diesel trader said.