Iraq overtook Saudi Arabia as the top crude exporter to India in September for the third time in 2015, according to tanker data, as the two biggest OPEC producers battle for market share in leading Asian buyers.
Saudi Arabia also lost its top spot in China last month, with Russia overtaking the world’s biggest crude exporter as the main supplier for the second time this year. Traders attributed the shift to a hike in Saudi’s official selling price of crude, Reuters reported.
India imported 640,300 barrels per day of oil from Saudi Arabia last month, about 30% lower than in August and the weakest in a year. The figure was still up 12.8% from a year ago.
While Saudi market share in India is shrinking, Iraq is expanding its hold over one of the world’s fastest-growing markets by offering attractive pricing.
“Saudis sell oil at OSP under term deals, while Iraqi oil is also sold in the spot market. And in an oversupplied market, you often find Iraqi barrels trading at discounts to the OSP,” said Ehasan ul-Haq, senior analyst at London-based consultancy KBC Energy Economics.
India shipped in about a fifth of its imports from Iraq in September, while Saudi Arabia’s share dropped to 17% from about 22% in August.
Faced with more competition in Asia, Saudi Arabia is trying to make inroads into new markets like Poland and, along with other big exporters, prepares for more competition from Iranian crude.
“When Iran comes to market, it will be a tough fight among Iran, Iraq and Saudi Arabia,” said Haq.
