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Europe US Saudi oil
Europe and the US refuse cheap Saudi oil
MOSCOW – Many oil refineries in the US and Europe are refusing additional Arabian oil, which Riyadh offers at great discounts, Expert writes.
The outcome of the price war launched by the Saudis to regain the lost market share in three years of oil production (especially in Europe) and to squeeze American shale oil out of it is now a big question, writes the Wall Street Journal (WSJ), citing its sources in Er Riyadh and oil dealers.
Saudi arabian oil Co. announced on March 9 a decrease in oil prices and a planned increase in its production in April by 2.5 million barrels per day. Saudi Arabia (KSA) launched a price war after Russia refused to renew the OPEC + agreement on the terms of Riyadh. Europe US Saudi oil
The collapse in oil demand caused by the shutdown of enterprises and factories in dozens of countries and started in China, led to a sharp drop in oil prices. It is not easy for Saudi Arabia to find new buyers for its oil under such conditions. The search was also hindered by the fact that for many buyers the stores were already filled with oil.
This week, after a tough two-week quarantine was announced with industrial enterprises shut down in India, demand for black gold collapsed in the second most populous country on the planet. Europe US Saudi oil
According to the logistics company Gulf Agency Company Ltd, 52 Indian ports stopped accepting cargo, including, of course, oil, citing the epidemic of coronavirus and all-Indian quarantine as a force majeure event.
Riyadh also benefits from a sharp collapse in the price of Brent crude oil, even stronger than the decline in Arabian oil prices. Such low prices are forcing the Saudis to introduce additional discounts on their Arab Light oil in April in order to remain competitive.
In recent years, KSA did not consider Europe as its main market and focused on Asia with its rapidly growing demand. However, Riyadh is now trying to oust Russian oil from Europe by selling its oil in Rotterdam at $ 25 a barrel, which is much cheaper than Russian Urals oil. Europe US Saudi oil
Despite such low prices, European refineries plan to cut purchases of Arabian oil by 25% in April, Reuters reports because major European economies, including Germany, France, Spain, Italy and the United Kingdom, halted production in the hope of slowing the spread of the Covid-19 coronavirus pandemic.
A weak consolation for Riyadh is that refineries all over the world refuse not only Arabian oil. For example, one Japanese company offers oil from the United Arab Emirates (UAE) with a 10% discount because it cannot find buyers in any way. Europe US Saudi oil
The situation may be doubly dangerous for KSA, because, according to WSJ, referring to oil traders, Russia managed to redirect the oil that it used to sell to Europe to China, where demand for it is slowly recovering.
Earlier it was reported that large oil companies were covered by a wave of cost reductions, as oil prices ranged from USD20 to USD30 per barrel. Royal Dutch Shell said it would cut costs by 20%, or USD5 billion, and also suspend its share buyback plan.
The French oil giant Total SA and the Norwegian company Equinor are going to take similar steps. Europe US Saudi oil
Earlier it was also reported that Russian oil companies, while maintaining current low oil prices, would be forced to overestimate new projects and could reduce investment in the least profitable fields.
Against the background of the price war with Saudi Arabia and the influence of coronavirus, the price of the Russian Urals variety fell to the lowest level since 2002, less than USD19 per barrel, and the discount to Brent increased to USD4 per barrel.
Europe US Saudi oil
mrcplast.ru
Author: Anna Larionova