Energy
0

Saudis Offer More Oil to Asian Clients to Beat Competition

Saudis Offer More Oil to Asian Clients to Beat CompetitionSaudis Offer More Oil to Asian Clients to Beat Competition

Saudi Arabia is offering extra crude to customers in Asia, a sign the world's largest oil exporter does not intend to cut output as it battles for market share with other top producers.

Its offers of more oil come after it recently completed maintenance programs that had reduced supplies from some fields during the second quarter, traders said.

The kingdom will also soon increase its Arab Extra Light crude output in an expansion of the Shaybah Oilfield, Reuters reported.

But some Asian refiners said they are not rushing to buy more Arab Extra Light after Aramco raised the oil's official selling price by 80 cents a barrel in June, making it more expensive relative to similar Abu Dhabi grades.

In a market that still has the most growth potential and in which many producers, including Iran, Iraq and Russia, are trying to increase sales that does not portend well for Saudi Arabia as it begins to bring new output online in June.

This month, Saudi Aramco asked at least two Asian refiners if they will lift more oil in June on top of contract volumes, two trading sources familiar with the matter said.

However, "their latest official selling price is not attractive to refineries", a trader with an Asian refiner said, adding that grades from the UAE, of quality similar to Arab Extra Light, were more competitively priced.  Iran and Iraq have also said they will increase output, slimming hopes that OPEC will agree to any long-term plan to curtail supplies when it meets in Vienna on June 2.

Iran said on Sunday it aims to raise its exports to 2.2 million bpd by mid-summer after it cut June prices to Asia to the biggest discounts to Saudi and Iraqi oil since 2007-8. Iraq said its exports have hit an all-time high of 3.9 million bpd on increased output from southern fields and that it is still on track to triple production by 2020.

Financialtribune.com