Saudi Aramco’s New Crude Oil Trading Policy

Oct 3rd, 2017

Saudi Aramco is preparing for initial public offering (IPO) to become a crude oil trader. In this regard, the company is extending a marketing division so that to sell own production crude and oil produced by other operators. As reported by World Oil magazine, the head of the division will be a CEO of Saudi Aramco Products Trading Co. Ibrahim Al-Buainain. He says that third-party crude oil volume will be delivered to the Aramco refinery plants with the purpose of performance improvement.

Edward Bell, an Emirates NBD analyst explains that turning of Saudi Aramco into a crude trader anticipates serious strategic changes.  However, this tendency has been already noted among other oil giants.  The expert’s opinion is that Saudi Aramco intends to prove that it is at equal positions with key oil industry players.

Today, Aramco Trading Co. daily sells 1, 5 million barrels of oil of which one-third comes from other producers.  The decision of the company to expand sales is targeted at capturing larger shares at Asian and African markets.

In the short run, Aramco will expand their headquarters in London to strengthen positions at West European market.  Moreover, Al-Buainain announced the opening of a company division in Singapore which will specifically specialize in crude oil and fuel trade.

According to estimations of the Government of the Kingdom of Saudi Arabia, Aramco’s worth is USD2 trillion while Sanford C. Bernstein & Co and other analysts value the company at a much lower range.  As previously said, Saudi Aramco is offering 5% of the shares.