3-17-2012Saudi oil sales to U.S. up 25 percent
The kingdom's shipments to the United States have quietly risen 25 percent to the highest level since mid-2008
Vela, Saudi Arabia's state oil tanker company, has booked at least nine very large crude carriers (VLCCs) capable of carrying 2 million barrels of crude each from the Middle East Gulf to the U.S. Gulf since the start of March, the biggest such wave of fixtures in years, analysts say.
The pivot to the U.S. market, which bore the brunt of Saudi output curbs after 2008, is a surprise for two reasons.
For one, many analysts had believed that the kingdom's modest output increase in recent months was bound for fast-growing Asian markets, particularly given the pressure on refiners there to reduce their imports from Iran.
Plus, it comes after a year in which U.S. crude oil imports shrank to their lowest since 1999 thanks to a dramatic boom in shale oil production and tepid demand from consumers who are making every effort to cut back as gasoline prices rise.
Omar Nokta, managing director with investment bank Dahlman Rose & Co, said in a note on Friday that it was the first time in "several years" for Vela to book so many tankers in such a short time.
The build appears related, at least in part, to a massive expansion project at Saudi Arabia's 285,000-bpd Motiva Port Arthur, Texas joint-venture refinery with Shell Oil, the U.S. unit of Royal Dutch Shell.
All expansion units are expected to be in production by the end of the second quarter of this year, with the expanded refinery reaching, by the end of the year, a maximum capacity of 660,000 bpd. Motiva Enterprises began circulating feedstocks through some of the expansion units in January
Motiva declined to comment. The expansion project, budgeted at $5 billion, began in 2007, and when complete will make the refinery the largest in the United States.