Saudi Aramco plans to shut its refinery in Yanbu and its largest refinery in Ras Tanura in late 2016 for scheduled maintenance. Each shutdown could add 4m to 8m barrels of crude into global markets, depending on the extent of the shutdowns and their duration, Gulf Business reported.
Yanbu Aramco Sinopec Refining Company (Yasref), a joint ownership between Aramco with 62.5% and the rest by China’s Sinopec, is expected to shut its 400,000b/d refinery complex for maintenance in November. Furthermore, the company plans to carry out maintenance at the Ras Tanura refinery in December for 20-25 days, which may involve only the 325,000b/d crude distillation unit, according to Al Arabiya.
Saudi Arabia’s fuel output is expected to fall during the refinery shutdowns, in particular middle distillates such as diesel and jet fuel. Yet, Aramco may choose to move excess barrels into storage or increase exports of Arab Light and Arab Heavy, during the maintenance periods.
A rise in Saudi crude exports on top of a recovery in Nigerian production would add to global supply which is likely to weigh on oil prices and push a potential market re-balancing further out into 2017.