LONDON (Dow Jones)–Saudi Arabia’s state shipping company, Vela, is set to send 11 supertankers, totalling up 22 million barrels of crude oil, to the U.S. this month and next, an abnormally high number, shipbrokers and analysts said Friday.
“This is the first time in several years for Vela to hit the market with such volume–and in such a short timeframe,” Omar Nokta, managing director at Dahlman Rose & Co., told Dow Jones Newswires. “In 2011, Vela fixed 1 VLCC to the U.S. every other month.”
Vela wasn’t immediately available to comment.
According to the International Energy Agency, Saudi Arabia’s oil production rose to 10 million barrels a day in February, its highest in 30 years. The Kingdom is expected to continue to increase output in the coming months, the IEA said in its monthly oil market report published Wednesday.
Many market watchers had expected the extra volume to head to Asia and Europe, regions that are set to be most affected by tightening sanctions against Iran.
But the latest shipping data show large volumes travelling to the U.S., while European and Asian buyers of Saudi crude told Dow Jones earlier in the month that they expected their supply of the Kingdom’s crude to remain steady in March.
According to the IEA high prices for Asian buyers of Saudi crude in April mean the Kingdom could be targeting Atlantic Basin customers, which include the U.S.
Politicians in the U.S. are scrabbling for ways to bring down the cost of oil ahead of this year’s presidential election, as prices at the pump soared this year.
Washington has pressed Saudi Arabia to commit to supplying extra oil to the market as sanctions against Iran kick in later in the year, while reports of a possible release of emergency stocks has pressured oil prices this week.
-By Sarah Kent and Neena Rai, Dow Jones Newswires