MOSCOW (MRC) -- Saudi Aramco offered more vacuum gasoil (VGO) supplies to be exported from its Jizan refinery in May, according to traders and shipping data, in a sign that the refinery is yet to ramp up to full output, said Reuters.
The Jizan refinery, Aramco's newest facility, had been expected to ramp up output for 10-ppm gasoil and cut VGO exports this quarter when it hits full capacity.
However, Aramco recently offered three cargoes of 525,000 barrels of VGO each for loading out of Jizan in May, shipping records showed, up from two cargoes in April. Saudi Aramco was not immediately available for comment.
The cargoes are slated for loading between May 1-3, May 11-13, and May 21-23. Aramco usually offers up to two VGO cargoes per month, according to trade sources and past tender records. VGO, a residual oil left over from petroleum distillation, is typically used as a refinery feedstock to produce diesel.
The rise in Aramco's VGO exports also comes at a time when diesel refining margins have weakened globally. Asian refiners' diesel margins have collapsed by more than 50% to USD14.46 a barrel on Tuesday, compared with the start of the year, Refinitiv data showed.
Meanwhile, benchmark Northwest European diesel refining margins fell below USD16 a barrel this week, their lowest since Feb. 25, 2022, as imports into the region remained high.
We remind, Saudi Aramco has signed 59 corporate procurement agreements (CPAs) worth a potential total of USD11 billion with up to 51 domestic and international manufacturers, as a part of its coveted in-kingdom total value add (IKTVA) localisation programme.