Aramco Trading Company has sold its first shipment of crude oil to West Africa, emphasizing the ambition to expand the trading arm of the Saudi oil giant.
The company allocated one million barrels of cargo from Equatorial Guinea’s Jafiro crude to load ExxonMobil Corporation in early June, according to knowledgeable traders. The shipment will be processed by Exxon’s own refining system in Europe, they said.
Saudi Aramco – the world’s largest oil exporter – is entering new markets as buyers demand replacement of Russian barrels. West African crude oil is an alternative to the Russian supply and is proving attractive because it is less sulfur-rich and denser than oil from the Middle East.
The Saudi giant has entered Russia’s backyard in recent months with a deal to supply Danish and Polish refiners, helping European countries free themselves from Russian oil. Aramco Trading, which is targeting 6 million barrels per day, is trading more unpaid barrels in Saudi Arabia than any other third party. The company often processes those barrels in non-Saudi refineries and buys products back for sale elsewhere.
Aramco Trading did not immediately respond to a request for comment.
Aramco Trading Unit is considering an initial public offering that will compete with similar segments such as Shell Plc, BP Plc and TotalEnergies SE, which could be one of the largest listings in the world this year.
Founded in 2011 in Saudi Arabia, according to the company’s website, Trading Arm primarily focuses on downstream output, such as refined products, before expanding into crude products and adding offices in Fujairah, London and Singapore. Aramco, which recently became the most valuable company in the world, could sell a 30% stake in the division, insiders said this week.
Other major oil producers have largely kept their trading units secret, wary of disclosing the confidentiality of an important source of profit. Middle Eastern energy companies are taking advantage of rising oil prices on their assets list because their governments want to reduce their dependence on oil and attract foreign investors.
© 2022 Bloomberg