Aramco Trading Company (ATC) sold its first-ever cargo of US West Texas Light (WTL) crude, with a South Korean refiner the buyer, as the Saudi Aramco unit expands its US oil dealings to boost trade volumes, four people familiar with the matter said.
ATC is key to Saudi Aramco’s strategy as it expands its refining and petrochemical operations to boost global sales. The trading unit has been buying US crude from Texas refinery Motiva to re-sell in Asia, the people told Reuters.
ATC has been shipping US oil such as West Texas Intermediate (WTI) Midland crude, Eagle Ford condensate and sour grade Mars to refiners in Japan, South Korea, Taiwan, Thailand and the United Arab Emirates since last year, they said.
It expanded that selection of US crudes earlier this month, loading its first-ever 1 million-barrel cargo of WTL, the people said. The shipment is expected to arrive at Hyundai Oilbank’s refinery in Daesan in October, they said.
This was also Hyundai Oilbank’s first WTL crude purchase, two of the sources said.
The sources declined to be named as they were not authorized to speak to the media. Saudi Aramco and Motiva did not respond to a request for comment. Hyundai Oilbank declined to comment.
The shipment follows an agreement this year for Saudi Aramco to take a 17 percent stake in Hyundai Oilbank, South Korea’s smallest refiner by capacity. The firms also signed two 20-year contracts for Aramco and its trading arm to supply 250,000 barrels per day (bpd) of crude from January 2020.
ATC was set up in 2012 initially to market refined products, base oils and bulk petrochemicals, but it has expanded into crude, competing with trading and international oil companies.
The company is using Motiva’s expertise in sourcing and pricing US crude to expand its trade volume, the people said. Because of its experience as a refiner, Motiva is able to get good prices for US oil, one person said.
The United States has become the world’s biggest oil producer as shale oil discoveries have pushed its output above 12 million bpd, sending US exports to a record above 3 million bpd since a crude oil export ban was lifted in 2015.
Over the past year, more of the output from the Permian Basin, the biggest US shale field, has been of a super light oil known as WTL with an API gravity - a measure of density - similar to condensate.
ATC has especially stepped up condensate sales to refiners in South Korea and the United Arab Emirates after they stopped importing the petrochemical feedstock from Iran due to US sanctions, trade sources said.
