Saudi Arabia is struggling to find customers for its excess crude oil as freight rates increase while demand plunges due to the coronavirus pandemic, Reuters reported, citing industry sources familiar with the matter. This undermines the country’s effort to grab market share from competitors by boosting output.
Saudi Arabia pledged to pump a record 12.3 million barrels of crude oil every day in April. However, weak product demand has prompted global refiners to cut their runs. International Energy Agency (IEA) President Fatih Birol on Thursday said that worldwide oil demand could fall by 20% in coming months.
US and European refineries are easing down purchases of Saudi oil, while Indian refiners had requested for shipment delays, the sources noted. Some market participants expect oil companies to cut purchases of Saudi oil by 25% next month. According to the sources, Shell will take less Saudi crude in April, while Neste will take no barrel of Saudi oil next month.
