Saudi Arabia lowers oil prices!

To increase oil sales to Asia, Saudi Arabia has reduced oil prices for all of its grades. The increase in official selling prices for three months has made refiners suffer.
But with Brent crude up 40% this year, OPEC+ believes that demand is already high enough to increase production and that there will be a global shortage by the end of the year. This indicates an increase in competition. Accordingly, Saudi Arabia, which practices the sale of its oil under long-term contracts, will have to lower prices, otherwise it risks alienating consumers when oil is too expensive.

Saudi Arabia lowers oil prices

According to the statement, Aramco is cutting the price of Arab Light oil by $1.30 a barrel, which is the main oil grade. Which is $1.70 more than the regional benchmark. According to a survey of traders and refiners in Asia last week, Aramco was expected to cut the selling price of this oil grade by about 60 cents a barrel.
Refiners in Asia, which are Aramco's biggest customers, were surprised by the scale of the cuts. According to buyers, the price cuts indicate that the Saudis are trying to compete on price with other producers and take market share from competitors.
Refineries have suffered as fluctuating demand has reduced profits from refining oil into fuels such as gasoline and diesel. Saudi Arabia sends more than 60 percent of its crude exports to Asia to major producers such as Japan, China, India and South Korea.

But Aramco is keeping October prices unchanged for the U.S. and Northwest Europe. And it has no plans to increase sales to the U.S. as that country uses strategic reserves. Refining facilities on the U.S. Gulf Coast are closed because of Hurricane Ida, which devastated the area.
And for Mediterranean buyers, Aramco is cutting prices for all grades by 10 cents a barrel.
In September, OPEC+ decided to continue reversing the supply cuts made last year in order to support prices. Led by Saudi Arabia and Russia, the Organization of Petroleum Exporting Countries and partners are moving cautiously to bring oil back to market.
In July, the group agreed to increase production by 400,000 barrels a day each month starting in August to reverse production cuts next year. Demand has improved from a year ago, and OPEC+ price cuts have helped support markets, with Brent crude trading at about $73 a barrel last week.
FX24

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