Saudi Arabia has reduced oil prices for the Asian market on average for $1 in attempt to keep the share. The last months the kingdom, on the contrary, refused a dumping waiting for further increase in prices.
In the past weekend Saudi Arabia has reduced the prices of September oil supply for clients in Asia in the range from $0,7 to $1,3 for barrel depending on extent of its cleaning, The Wall Street Journal reports. The edition notes that this step promoted fall of world oil prices lower than $42 for barrel.
According to WSJ, discounts from Saudi Arabia were the biggest since October of last year. In recent months, as analysts of Reuters noted, the kingdom has refused a dumping, expecting to gain income from price increase, but not from expansion of a share in the market.
At the beginning of May Saudi Arabia has sharply raised the prices for Asia that experts have regarded as a sign of increase in demand.
WSJ source familiar with discussion of a question of reduction of prices by Saudi Arabia has told that discounts have been given to resist to competitors from the Middle East and from Europe. According to the edition, it is about Iran, Iraq and Russia.
More than a half of export of the Saudi oil is the share of the Asian market, but the kingdom continues to hand over line items there. In China increases export Russia which is guided by deliveries by independent oil refinery. According to the Chinese customs, the amount of the Russian export has grown in annual measurement by June of this year by 9% to 4 million tons. The Saudi deliveries for the same period have decreased by 14% to 4,6 million. According to OPEC, Russia has increased in the second quarter oil and gas condensate production by 150 thousand barrels a day in comparison with last year, having reached the level of 11,03 million barrels a day.
In the Indian market, according to the local ministry of oil, Saudi Arabia was bypassed by Iraq which I have sold in the second quarter 11 million tons that is 1 million tons more, than Saudi Arabia. A year ago the picture was opposite, and the Saudi deliveries have exceeded Iraqi on 900 thousand tons.
The research associate of the Center of global energy policy in case of Columbia University Jamie Uebster has noted that partially weakening of the Saudi line items in Asia is caused by actions of Iran, which from the moment of removal of sanctions in January увеличл production on 600 thousand barrels/days.
According to consulting agency JBC from Vienna, cumulative export of Iran to China, Japan, South Korea and to India constituted in the first half of the year 2016 on average 1,4 million barrels a day that is 29% higher than last year's level.
WSJ notes that the Saudi discounts are caused not only reasons of competitiveness — they are also directed also to stimulation of demand in the slowing-down Chinese market, has told the edition the informed source. The OPEC expects that consumption of oil in China will grow this year by 280 thousand barrels a day whereas a year ago it has increased by 350 thousand barrels a day.