Aramco Aims to Double Oil Trading by 2020

Aramco Trading currently trades 3.6 million barrels per day of crude and refined products.
Aramco Trading currently trades 3.6 million barrels per day of crude and refined products.

Aramco Trading, the commercial arm of oil giant Saudi Aramco, will be looking to trade up to 6 million barrels per day of crude and refined products by 2020, up from 3.6 million bpd now, Aramco Trading’s CEO Ibrahim Al-Buainain said.

Nearly doubling its oil trading volumes would put Aramco in a position to rival the world’s largest independent oil trader, Vitol Group, which traded just over 7 million bpd of oil and oil products last year.

To compare, Shell and BP—both integrated oil companies like Saudi Aramco—handle 12 million bpd and around 8 million bpd, respectively, according to Bloomberg data, Oil Price reported.

Aramco Trading—launched in 2012—initially traded only refined products, but in 2017 it began to trade third-party crude oil to deliver to its refineries outside Saudi Arabia.

It also sells Saudi crude to refiners that do not have long-term crude delivery deals with Saudi Aramco in exchange for oil products processed at the same refineries.

"Aramco Trading’s crude oil volumes trade is still small," Al-Buainain told Bloomberg.

Saudi Aramco aims to expand its downstream presence globally, especially on the prized Asian markets, to secure long-term sales outlets for its crude oil.

Earlier this month, Aramco signed a preliminary deal with an Indian consortium to study the construction of a mega refinery and petrochemical complex on India’s West Coast estimated to cost $44 billion. The refinery is planned to be capable of processing 1.2 million barrels of crude oil per day.

Another national oil company in the Middle East—the Abu Dhabi National Oil Company—also aims to boost trading to support its international downstream growth plans.

ADNOC said on Monday that it was establishing a new trading unit that would “manage non-speculative trading to further maximize value from every barrel of crude oil and refined product that is produced and marketed by the company”.

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