Saudi Aramco has committed to a 20-year crude supply deal with South Korea’s S-Oil, according to a Reuters report citing S-Oil.
The deal will see Aramco supply S-Oil’s total 669,000 barrels per day – or two ULCC tanker shipments a week – refining capacity for the length of the contract, and is unusual in a market where one-year supply deals are the norm, the company said.
Pricing was not disclosed.
Aramco is a JV partner with S-Oil, with a 35% stake in the company. The company’s CEO since 2008, Ahmed A. Al-Subaey, is a Saudi citizen and was formerly CEO and President of Saudi Petroleum International, Aramco’s US subsidiary.
The deal follows intensive lobbying of GCC oil producers by Asian heads of state. Diplomatic pressure from the US has led China, Japan and South Korea – despite not being privy to sanctions against Iranian oil exports – to secure supplies from elsewhere.
South Korea has been assiduously nurturing ties with Saudi, providing cost-competitive contracting services through its national EPC giants such as Samsung Engineering, Hyundai Engineering & Construction and Daelim in exchange for increased oil supplies.
S-Oil said the deal “would not have been possible had it not been for the mutual trust built between the two companies for a span of more than 20 years and the strong friendship between Korea and Saudi Arabia.”
