POLAND is importing crude from Saudi Arabia, creating a new seaborne trade generating fresh cargoes for tankers.

The intriguing development has been brought about by Saudi Arabia lowering its prices to grab European market share from rival oil-producing giant Russia.

The result is a notable rise in Poland’s seaborne imports of oil.

In February, Poland imported 150,000 barrels per day on tankers, according to data from Lloyd’s List Intelligence. This was up from 130,000 bpd a year earlier. Poland’s average seaborne oil imports in 2015 came in at around 200,000 bpd, up from 170,000 bpd in 2014.

Suezmaxes and aframaxes haul cargoes to Poland, so are the vessel type to benefit from the country’s increased thirst. Imports of around 200,000 bpd are enough cargoes for around two aframaxes a week.

These tankers have traditionally hauled cargoes to Poland from Russia, Nigeria, Israel, and Azerbaijan, bound for oil terminals at Gdansk, according to Lloyd’s List Intelligence.

But now the world’s oil exporting giant Saudi Arabia is getting in on the act.

Polish oil refiner Grupa Lotos recently received a cargo from Saudi Arabia and expects further shipments as Saudi Arabia lowers prices to attract new customers, according to the refiner.

Saudi Arabia’s price-lowering strategy is all part of its long-running attempt to grab market share, oil industry experts tell Lloyd’s List.

The kingdom is already embroiled in a market share war with the US, with the aim of squeezing out US shale oil drillers. This has worked to some extent, with the number of US drilling rigs slashed.

Now it is Russia’s turn to be Saudi Arabia’s target, as the Saudis attempt to take European market share from Russia, sources tell Lloyd’s List.

Shipments into Poland from oil-producing countries outside of Russia have indeed been climbing over the past few months, confirmed shipbrokers Howe Robinson Partners.

Regularly monthly flows of Arab Light arrive from storage tanks in Rotterdam, feeding Polish refiner PKN Orlen and the Lotos refinery, according to Howe Robinson Partners. Arab Light is the name for Saudi Arabia’s crude grade.

On top of that, Howe Robinson Partners states that PKN Orlen received a shipment of 733,000 barrels of Arab Light at Gdansk’s Naftoport terminal shipped from Sidi Kerir.

Fixture data from Clarksons shows the 2008-built, 115,567 dwt aframax Alqadisia loaded a cargo from Sidi Kerir, bound for Gdansk, around three weeks ago.

The tanker is owned by Libya’s General National Maritime Transport Company, according to Lloyd’s List Intelligence.

The vessel arrived in Gdansk with its Middle Eastern cargo last Saturday, according to vessel-tracking data from LLI.

The port of Sidi Kerir is the Mediterranean port of the Suez-Mediterranean pipeline, which carries Middle Eastern crude to Europe, according to LLI. The pipeline is a joint venture between Egyptian General Petroleum, Saudi Arabian Oil Company, three Kuwaiti companies and Qatar Petroleum.

Although crude sales from Saudi Arabia to Poland have thus far been on a spot market basis rather than firmer longer-term contracts, the significance is that it is actually happening, generating exciting new business for crude tankers, according to a tanker industry contact.

The potential for growth certainly exists, so long as the Saudis pursue their “market share grab strategy”, he added.

Sourced by Lloyd's List