Key OPEC countries are returning to the policy of discounts for buyers of its oil as shale competitors from increasing U.S. production and total U.S. production hits record in the history of the country.
State oil company Saudi Arabia, Saudi Aramco has sharply reduced the official price for the entire range of its varieties to the European consumers according to the price list Saudi Aramco Reuters.
For North-West Europe prices brands of light (Arab Light and Arab Extra Light) will be reduced by 20-55 cents, and heavy (Arab Medium and Arab Heavy) – 0.8-1.15 dollar.
Mediterranean countries will get a considerable discount for them Arab Extra Light will become cheaper by 1.3 dollar, Arab Light – 1.4 dollar, Arab Medium – $ 1.5, Arab Heavy – 1.7 dollar.
Buyers in the US since April will be offered a discount of 10 cents on heavy grades. The key for the Saudis Asian market Arab Medium and Arab Heavy will be sold for 25-30 cents cheaper.
However, the price of the mass of the Saudi grades – Arab Light for Asia is to remain unchanged.
A step further, the Saudis decided to go to Iraq – the second largest member of OPEC production: Iraqi oil in April will be sold at a discount in all markets and across all grades.
For Asia light Basra Light will be cheaper by 35 cents, Basra Heavy at 45 cents. The official price will be set at minimum in 7 months level with a record over two years discount against a similar Saudi grades.
For Europe light oil will drop to 95 cents, and the heavy 1.5 dollar. For USA and countries in South and Central America, the discount will be 10 cents.
At the same time OPEC countries decided to dramatically increase exports to Asia, told Reuters working in the region traders in Saudi Arabia since January, additional restrictions on the supply that was administered at the end of 2017.
Bahrain for two months interrupted the shipment of batches of Banoco Arab Medium, has renewed it in the last three weeks. Iraq has increased export of oil from Basra to the historical record, and Qatar increased the supply of grade al-Shaheen.
It is obvious that although the Saudis are trying to put on a and to save “face of a poker player” in any situation, the sharp rise in US production can not cause them anxiety, especially due to the fact that “the oil is starting to look for a niche in the market and finds her there, where he used to dominate OPEC,” said consultant Quantum Reservoir Impact, Nansen Saleri.
According to the us Department of energy, in the first week of February, production in the United States reached 10.25 million barrels per day – a record for the entire history of the oil industry. The volume of exports in separate weeks last year exceeded 2 million barrels per day, making US the 7th supplier to the world market.
Another problem for OPEC is the ability of kancevica in record time to increase production, says Salary: the amount of spare capacity in Permian basin it reaches 1 million barrels.
In fact, the US take the status of a marginal supplier Saudi Arabia, which has spare capacity of 1.5 million barrels a day.