Saudi Arabia to reduce diesel

by Gulf News, United Arab Emirates

Saudi Aramco will cut gas oil (diesel) exports to 880,000 tonnes next year from 2.2 million tonnes in 2007, and will not renew any of its annual term deals, as domestic demand grows swiftly, industry sources said yesterday.

Saudi Arabia is expected to keep term jet fuel exports steady at one million tonnes. Saudi Aramco did not issue a tender to sell term middle distillates this year but short-listed players for price discussions for the upcoming weekend.

"Gas oil exports will be reduced because domestic demand is very strong," said one source involved in supply discussions, adding that all shipments will be sold on a spot basis. The grades will be a mix of 0.05 per cent and 0.5 per cent sulphur. Another source said: "Domestic diesel demand has already caught up with production."