Saudi Arabia has offered steep new volume-linked crude oil price discounts to Exxon Corp. on condition that the oil not be sold to Japan, wet oil traders at five Japanese oil and trading companies said.
(Wet oil is cargoes of oil, rather than paper barrels, which are trades on the futures exchange.)If Exxon sold the oil in Japan, Saudi Arabia would be forced to offer new discounts to Japanese term customers, they said.
The traders said eight oil tankers were ordered by Saudi Arabia last week, and approximately five more were ordered over the past few days, all with options for use in Rotterdam or in the Caribbean.
They said it was most likely the ships will be used for floating storage in the Caribbean near the United States, with some of the tankers likely to be destined for Exxon's facilities near New Orleans.
However, there was also the possibility some of the tankers would be floating near Rotterdam so that Saudi Arabia would have oil available for European customers at short notice, they said.
Accurate information about the discounts and the intended use of the tankers was scarce because both Exxon and Saudi Arabia were trying to keep their moves secret, the traders said.