Last Updated: Wed Feb 15, 2012 12:42 pm (KSA) 09:42 am (GMT)

Yemen seeks more diesel as refinery still shut

Yemen currently consumes about 260,000 tons of diesel a month. (File photo)
Yemen currently consumes about 260,000 tons of diesel a month. (File photo)

Yemen is seeking 270,000 tons of diesel, increasing an earlier tender requirement, as its fuel donations from Saudi Arabia are expected to end this month and its main refinery remains shut, sources said.

The large requirement is expected to increase premiums for high sulphur gasoil in the Middle East, where supply of the grade is tight as refineries shift production towards lower sulphur gasoil.

Yemen’s Aden refinery is seeking three cargoes of 90,000 tons each of high sulphur gasoil for delivery over the first three weeks of March in a tender that closes on Friday.

This marks the country’s first diesel spot imports since December, when Saudi Arabia started covering Yemen's fuel needs for two months.

Yemen had earlier sought 50,000 tons of high sulphur gasoil for delivery in late February, but has now revised the amount and delivery dates, sources said.

It is separately seeking 30,000 tons of jet fuel for delivery in late February.

Saudi Arabia’s impoverished southern neighbor is reliant on fuel imports and donations as its main refinery has been shut for almost two months after blasts ripped through its oil pipeline and halted the flow of crude.

But Saudi Arabia is not expected to give Yemen any diesel in March, a source familiar with the matter said.

Saudi Aramco has provided the fuel donation from its own units, as well as imports from the market, asking sellers to discharge the cargoes in Yemen instead of in Saudi ports.

Yemen’s diesel consumption is about 260,000 tons a month, Oil Minister Hisham Sharaf Abdalla has said.

Oil production and exports from Yemen’s Masila oilfield, the country’s largest, have also stopped after workers from state-owned PetroMasila went on strike last Thursday.

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