Saudi playing key role in product tanker trades

With more than 3.3 million barrels per day (bpd) of oil products refining capacity, Saudi Arabia plays a key role in the product trades, supplying a wide range of exports to east and west, but also taking imports of products such as gasoline and diesel. The profile of the country’s products trades has changed significantly as a result of Russia’s conflict, according to the Poten analysis.

With six refineries on the country’s Red Sea coast and three in the Arabian Gulf, with capacities of 1.93 million bpd and 1.255 million bpd respectively, Saudi is well-placed to export products both to east and west.

According to Poten’s figures, the Saudis exported an average of 1.5 million bpd of refined products between 2020 and 2023, less in 2020 due to lower demand as a result of Covid. Despite some month-to-month fluctuations, export volumes are relatively stable, the broker said in its latest weekly opinion.

Products exports include long-haul trades to China, Singapore, Japan and Europe, but the country also has important short-haul trades to neighbouring Gulf states, Egypt and India. Exports to China are predominantly chemicals such as monoethylene glycol, styrene, and acetone shipped in chemical and parcel tankers rather than products carriers, Poten said. The country’s exports to Europe, for example, two thirds of which is diesel, are shipped in Aframax LR2s. Meanwhile local trades both around the Saudi coast and on short-haul routes to other Gulf destinations provide steady employment for MRs and LR1s.

Since the Ukraine conflict and the European Union’s ban on Russian product imports, Saudi’s exports to Europe have increased. Poten says these exports have replaced some of the diesel previously imported by European countries from Russia.

Meanwhile, new export trades in fuel oil and refinery feedstocks have also sprung up. These dirty products were not exported from Saudi to Europe prior to the conflict, Poten said, but since May 2022, about 50,000 bpd are now being shipped, mostly on Aframaxes.

Saudi imports about 150-200,000 bpd of clean petroleum products, mostly gasoline and diesel, according to Poten’s analysis. Between 2020 and 2022, India was its main supplier but since the start of this year, Russia has become the dominant provider as the country seeks other export options for its products. The Saudis also import small volumes from their Middle East neighbours including Kuwait, Qatar, the UAE, and Oman.

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