Saudi Arabia's national oil company Saudi Aramco refuted some media reports claiming its terms of payment for crude oil purchases have been changed.
In a statement on Wednesday, the company denied claims that it has given oil refineries in Asia and Europe the right to delay payments for deliveries of crude cargo for up to 90 days as plants struggle with declining demand.
“Contrary to a recent media report, Aramco has not made any offers of extended payment terms to crude oil sales,” the statement read.
Low oil consumption, the rising supply glut around the world and weak crude prices due to the novel coronavirus (COVID-19) have caused a build-up in global oil stocks whose storage capacity is now more than 80% full.
Quarantine measures along with the decline in transportation and weak economic activities have decreased global oil demand by around 20 million barrels per day (bpd). To mitigate the negative impact of COVID-19, Saudi Arabia and Russia met on March 6 but failed to make deeper output cuts, which pushed crude prices on March 30 to their lowest levels since 2002.
Led by the two countries, the 23-member group, known as OPEC+, agreed on April 12 to curb their total output by 9.7 million bpd starting from May 1. However, the absence of cuts until then means oil companies and governments need to find solutions to the storage of produced crude.
By Sibel Morrow