Cosmo Energy has not been notified of any cut in Saudi oil supply


Japanese oil refiner Cosmo Energy Holdings has not received a notice from Saudi Arabian oil company Saudi Aramco cutting its crude supply, a company executive said.

Saudi Arabia and other major oil producers agreed last month to cut 9.7 million barrels per day of output in May and June to offset the plunge in fuel demand because of the coronavirus outbreak. Aramco told at least three Asian buyers it would trim June shipments by up to 30% for some crude grades in line with the cuts.

However, Takayuki Uematsu, Cosmo’s senior executive officer, said Aramco had not sent any notice of a cut or a change in crude grades.

Cosmo expects Japan’s gasoline demand to fall 16% and jet fuel demand to plunge 44% in the financial year to next March from a year earlier, with air traffic and vehicle transport being restricted because of the coronavirus, Uematsu said at an earnings briefing.

But Cosmo’s annual fuels sales will only drop 4% as it supplies gasoline to gas station operator Kygnus Sekiyu, he said.

Japan’s third-biggest refiner aims for an average run rate of 86% at its refineries this year, including scheduled maintenance, against 87.9% a year earlier.

The company has no plans to extend any maintenance or shut refineries despite the pandemic, as it needs to keep its run rate at “almost full if turnaround impact is excluded, to meet demand,” Uematsu said.

Cosmo on Thursday reported a net loss of 28.2 billion yen ($262 million) for the year ended in March, as a collapse in oil prices led to a massive appraisal loss on its inventories.

But it forecast a profit of 14.5 billion yen for the current year, with an assumption of Dubai oil prices gradually recovering to $40 a barrel in the January to March 2021 quarter.

$1 = 107.7500 yen Reporting by Yuka Obayashi; Editing by Christian Schmollinger

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