Aramco moves into Russia’s backyard with Polish oil deal

Aramco moves into Russia’s backyard with Polish oil deal

Bloomberg / London

Saudi Aramco’s agreement to supply almost half of Poland’s oil will give the world’s biggest crude exporter a stronger foothold in a region that Russian producers have long dominated.

Aramco will buy 30% of a refinery on the Baltic coast, as well as a wholesale fuel unit. It also signed a long-term delivery deal with Polish refiner PKN Orlen SA.

The Saudi-government-owned oil giant will be ramping up oil sales in Russia’s energy backyard just as the two nations, who are joint leaders of the Opec+ producer alliance, work to wind down nearly two years of production cuts they implemented with the onset of the pandemic.

“Our expanding global network of refineries and chemical joint ventures allows us to reach new markets with our products, and strategically place crude oil volumes across different geographies,” said Mohamed al-Qahtani, Aramco’s senior vice president for downstream.

The deal could have implications beyond Poland, as Orlen may use the crude in refineries in Lithuania and the Czech Republic. Many Eastern European plants were designed to run on Russia’s Urals grade and some may require technical adjustment to use different barrels. Crude from Saudi Arabia and Iraq regularly competes with Russian barrels for