By SARAH KENT, SELINA WILLIAMS and NEENA RAI
LONDON -- US imports of Saudi crude have soared this year,
and look set to continue to climb, shipbrokers and
analysts told Dow Jones, surprising many market
Although the increase in Saudi oil exports has been well
reported in recent months, many investors expected additional
volumes to travel to Europe and Asia, areas that are most
likely to be affected by tightening sanctions against Iran.
According to the International Energy Agency, Saudi Arabia's
oil production rose to 10 million bpd in February - its highest
in 30 years - with most of this additional supply heading to Europe and Africa.
But the US has also been taking extra barrels, data
According to the Energy Information Administration, the US
increased its imports of oil from Saudi Arabia some 38% in the
first 10 weeks of 2012, and shipping fixtures show this trend
is set to continue.
Vela International Marine Ltd., the shipping arm of Saudi
Arabian Oil Company, or Saudi Aramco, is scheduled to take 11
supertankers Westbound at the end of March and in early April,
The very large crude carriers, or VLCCs, are capable of
carrying up to 22 million bbl of oil.
"This is the first time in several years for Vela to hit the
market with such volume--and in such a short timeframe," Omar
Nokta, managing director at Dahlman Rose & Co., told Dow
"In 2011, Vela fixed 1 VLCC to the US every other month,"
Vela was not available to comment.
According to UK-based tanker tracker Oil Movements, Vela's
westbound oil shipments from Saudi Arabia are at their highest
level in three years.
Although the destination is stated as west, the majority of
that crude typically ends up in the US Gulf, Oil Movements head
Roy Mason told Dow Jones Newswires.
"Putting more oil into the Atlantic Basin is a message that
the Saudis will do something," he said as sanctions tighten
against Iran, putting increasing pressure on oil prices as
supply concerns mount.
This has left politicians in the US scrabbling for ways to
bring down the cost of oil ahead of this year's presidential
Washington has pressed Saudi Arabia to commit to supplying
extra oil to the market when more sanctions against Iran kick
in later in the year, while reports of a possible release of
emergency stocks have pressured oil prices lower this week.
Mason said the levels of westbound Vela oil shipments for
March were around double those seen in the same period in the
past two years.
"It's unusual by recent standards but not historically,"
Mason said, adding that Saudi crude shipments to western
destinations were around this level about five to six years ago
before the recession in the US.
Mason said the crude could be going into the Motiva Port
Arthur refinery in Texas, which is in the
process of commissioning units that will increase the plant's
throughput capacity by 325,000 bpd. Motiva is jointly owned by
Saudi Aramco and Royal Dutch Shell.
Furthermore, the size of the shipments could be a sign of an
anticipated rise in US crude demand as many US refineries will
be coming out of their spring maintenance in April and May, a time
when facilities typically ramp up
gasoline production to meet peak demand in the summer driving
season, he added.
Mason said that early indications show Vela fixtures
climbing in April, but the picture is as yet incomplete as the
program is only just getting underway.
"It's a well-supplied tanker market so there's no scramble
to fix in advance," he added.
Dow Jones Newswires