Nearly half of Yemen’s oil production has shut down because of a blast that ruptured a major oil pipeline. Yemen, already experiencing a political crisis, has asked Saudi Arabia for oil, Reuters reported on Wednesday.
The blast occurred in March 2011, and rebel tribesmen are suspected. It has halted the flow of light Marib crude, forcing its 130,000 barrels-per-day Aden refinery to shut.
"By importing crude oil, we would keep the Aden refinery going," a senior official who asked for anonymity told Reuters.
"The economics of it makes sense. It’s being discussed within the government," he added.
While the deal is still not finalized, the Yemeni government was in talks with Saudi Aramco to import around two million barrels of crude, Gulf-based traders said.
"The only choice for Yemen is to buy crude because at this point Saudi is not ready to export products because they need products themselves," one trader said.
Yemen normally imports around 30,000 tons of oil products per month, but with the Aden refinery blast, the country last week bought 105,000 tons of jet fuel, gasoline and gas oil.
Around 110,000 barrels of that is light crude, which is in short supply globally after the loss of Libyan output in February 2011.
Yemen produced a total of around 260,000 barrels per day of crude oil in 2010.
Saudi Arabia also regular importer of gasoline due to its buoyant demand, but also witnessed increased purchase since late April when maintenance shutdown at its PetroRabigh refinery led to reduced supplies.
Yemen imported 15,000 tons of diesel from Saudi Arabia last week, followed by a further seven cargoes of diesel and gasoline from unspecified suppliers, shipping sources said.
"They’ve been receiving supplies of gasoline, diesel into Hudaida and Aden. At least seven vessels have come to Hudaida since the middle of last week," a source said.