Saudi Oil Price Cuts Reigniting Market Share War With Russia

Asian oil traders are bracing for another round of hefty price falls on Monday in key benchmarks Brent and Dubai after the world’s top exporter Saudi Arabia slashed prices, reigniting a market share battle among key producers.
The world’s top producers including Saudi Arabia, Russia and other Middle East producers were last locked in a market share war between 2014 and 2016 as they tried to squeeze out shale production from the United States by reducing prices and offering more supplies to Asia, Reuters reported.
The battle ended when the Organization of the Petroleum Exporting Countries and Russia struck a deal to cut production.
That truce shook on Friday when OPEC, led by Saudi Arabia, failed to reach agreement with the world’s No. 2 oil producer Russia to deepen production cuts aimed at shoring up prices.
Global price marker Brent dived more than 9% on Friday to $45.27 a barrel, its biggest single day loss in 11 years.
Late on Saturday, Saudi Arabia slashed its official selling price for April for all its crude grades to all destinations. The producer also planned to raise in April its production to over 10 million barrels per day for the first time since May 2019.
Price cuts for key growth market Asia were as deep as $4-$6 a barrel, likely the biggest price reduction ever, and three times more than expectations of $2 a barrel cut for flagship Arab Light grade.
The slump in crude costs will likely support Asian refiners’ margins which have been battered by a demand slump from the coronavirus outbreak, traders and analysts in Asia said.