Oil Falls As Saudi Arabia Launches New Price War With Record Discounts

Oil Falls As Saudi Arabia Launches New Price War With Record Discounts ...
oilprice.com 15/04/2020 Economy

Keywords:#Arab, #Arabia, #Aramco, #Asia, #Brent, #Cartel, #China, #Dubai, #Egyptian, #Europe, #IMF, #India, #Iran, #Mediterranean, #Middle_East, #OPEC, #Oilprice.com, #Oman, #Persian, #Persian_Gulf, #Reuters, #Riyadh, #Russia, #Saudi, #Saudi_Arabia, #Saudi_Aramco, #United_States

By ZeroHedge - Apr 14, 2020, 2:30 PM CDT
This weekend's 11th hour decision to cut OPEC oil output by 23% was supposed to end the oil price war between Saudi Arabia and the rest of OPEC+, but it appears Saudi Arabia did not get the memo.
While oil production may (or may not) be cut by 9.7mmb/d on May 1, Riyadh remembered that to capture market share one can manipulate volumes, which are now set as per this weekend's OPEC+ agreement or one can adjust price discounts, which are not. And as the kingdom faces stiff competition from rival suppliers for market share in the prized Asian market (or at least what's left of it after India cut demand by 70%), the OPEC leader slashed its official selling prices to Asian customers for May by larger-than-expected margins this week, while keeping prices flat for Europe and raising them for the United States.
On Monday, Saudi Arabia’s oil giant Aramco set the May price for its Arab light crude oil to Asia at a discount of $7.3 to the Oman/Dubai average, down $4.2 a barrel from April, according to a document seen by Reuters. Asian refiners had called on Saudi Arabia to slash its crude OSPs for a third straight month in May after Middle East benchmarks and refining margins dropped amid ample supplies and lower demand due to the coronavirus. Overnight, China’s customs bureau reported that overseas energy purchases weakened in March as demand from the top importer took a hit from the coronavirus pandemic. Crude oil imports fell to the equivalent of about 9.72 million barrels a day, the least since July.
While Aramco cut Asian prices in hopes of beating Russia, Iran and other producers to the punch, it raised the May OSP of its Arab light crude oil to the United States to a discount of $0.75 per barrel versus the Argus Sour Crude Index (ASCI), up $3 a barrel from April, according to the document. Aramco left its OSP for Arab light crude oil to Northwestern Europe unchanged from April at a discount of $10.25 per barrel to ICE Brent.
Premium: A Global Oil Cartel?
The cut in prices to Asia reflect weak demand, while OSPs to Europe and the United States reflect oil market fundamentals and the global supply cut pact, an industry source familiar with the pricing process told Reuters.
Then on Tuesday morning, Saudi Aramco again cut official selling prices of all four grades to new record lows from Egyptian port of Sidi Kerir for May, in line with big cuts in prices for other customer regions, with some grades sold at a discount of as much as $10.95/bbl:
Arab Light OSP set at $9.85 discount to ICE Brent, vs -$8.40 for April
Arab Extra Light also at -$9.85/bbl vs -$5.60/bbl
Arab Medium -$10.95/bbl vs -$10.20/bbl
Arab Heavy -$10.95/bbl vs - $10.50/bbl
Prices of all four crude grades from Sidi Kerir are 45c higher than those shipped from Ras Tanura in Persian Gulf for customers in Mediterranean, compared with 20c higher in April’s price list.

And so, between the IMF's warning earlier today, and Saudi Arabia's quiet restart of the oil price war, Brent tumbled by over 5.5% this morning, sliding below $30, after hitting a high over $36 just two trading days ago as the unprecedented chaos in the energy market continues.

--- ---
...

Read more from Source »

Related articles based on keyword density
ISIS: The Spoils of the "Great Loot" in the Middle East - FPIF...
fpif.org 02/07/2014 Politics
Adding yet more warfare to the current crisis in the Middle East will perpetuate exactly what the imperial powers set out to do: tear an entire region...View Details»

'Nothing left' if Iran hit Saudi facility: FM Zarif ...
aljazeera.com 23/09/2019 Politics
War of words over Saudi oil attacks with the US continues as Iranian leaders arrive for the UN General Assembly. 23 Sep 2019 18:01 GMT Tensions in the...View Details»

Iran’s water crisis the product of decades of bad planning - The Washi...
washingtonpost.com 03/07/2014 Nature
By Jason Rezaian July 2 at 7:00 AM Follow @jrezaian TEHRAN — Iran is headed for a water shortage of epic proportions, and little is being done to re...View Details»

Iran Is China’s Secret Weapon for Killing off the US Dollar’s Global R...
strategic-culture.org 06/10/2019 Politics
By Federico Pieraccini October 3, 2019 There is a strong current of change affecting the international political arena. It is the beginning of a revol...View Details»

The Crises in Syria, Lebanon and Egypt: The Plan to ‘Divide and Conque...
globalresearch.ca 26/08/2013 News
Western media has accused the Syrian government of launching a chemical attack in an area east of Damascus that killed hundreds of civilians. It is t...View Details»


EOF