Saudi Arabia raises oil price for Asia, reduces for Europe and the US - big blow to India

 

Saudi arabia increases oil price for Asia

The disagreement between Saudi Arabia and India over the production cuts of crude oil took yet another twist today when the former increased the price of oil, known as OSP, the official selling price, for Asia while bringing it down for the US and Western Europe.

The main customer block for Saudi Arabia has been in Asia for years; yet the price hike comes at a time when the region is struggling to cope with the multitude of consequences due to the pandemic; in addition, there are signs that the region may slide into a third wave of the pandemic.

The kingdom, however, does not seem to be looking at the economic prospects of the region from the pandemic perspective. On the contrary, it sees the potential for growth in the region outweighs the hypothetical inhibitions against the same.

Aramco, the world’s largest oil company that is owned by the Saudi government, plans to increase all grades of crude for Asia by 20 – 50 cents from May.

The price of all grades to Western Europe will remain unchanged whereas the Arab light for the region will be reduced by 20 cents. Most grades of oil for the US, meanwhile, will be down by 20 cents.

Although Saudi oil minister insisted that the unexpected phone conversation with his US counterpart on the eve of the recent OPEC+ meeting, it’s clear that the conversation has produced something in favour of the US interests.

As for India, the price hike is major blow, both diplomatically and economically; it will cause reverberations across the political domain too.

Indian oil minister has been vehemently opposing the production cuts for months and even issued thinly-veiled threats that they would look for alternatives elsewhere.

Having been true to his words, in February, the US became the second biggest crude oil exporter to the world’s third largest consumer.

Turning its back on the Middle East suppliers, especially Saudi Arabia, however, is easier said than done: the combination of the proximity, shipping cost and above all, the reliability of consistent supply still makes the Middle East as the best option for India as far as its crude oil imports are concerned.

In this context, it’s interests of both countries that up until the oil issue came up, used to enjoy mutually beneficial pragmatic relations, to tone down the war of words at ministerial level. It certainly is good for the region too for various reasons, as volatility in any form is in no one’s interest.

Popular Posts

Wil Iran attack Israel soon? Only time will tell!

Image
  Credit: Google Maps With Iran's threat against Israel in a direct strike, the tension in the Middle East went up a few notches on the scale of uncertainty, as the United States made it clear once again that it would not be a passive observer if a conflict erupts. The rising tension came in the wake of the daring attack carried out by Israeli F-35 fighter jets on the building that was adjacent to the Iranian embassy in Damascus, the Syrian capital. Seven Iranian nationals, along with a few Syrians, died in the attack, two of them were from the elite Iranian IRGC - Republican Guards; they were very high ranking officers. In response to the attack, Ayatollahs Ali Khamenei, the Iranian  supreme leader, said that Israel will be punished in kind, during an Eid message on Wednesday; he did not imply in what form the retaliation could come; nor did he say whether it was imminent, leaving the ambiguity open to interpretation by military and political analysts. The supreme leader, however,
Read more

Will Venezuela manage to extend the period of waiver of sanctions?

Image
  Chart:www.oilfutures.co.uk | Data: OPEC As the 53rd JMCC, Joint Ministerial Monitoring Committee, of the OPEC+ is scheduled to take place on April 3, analysts are looking at every possible scenario that could rise in the aftermath of such a meeting. A consensus has already emerged among them that the OPEC+ would stick to its production quota for each member country. That means the official position of the OPEC+ will maintain the current production cuts as long as necessary, without increasing the production to appease the influential customers.  The cartel wants to stick to the production targets, already agreed upon, in 2024 without unnecessarily worries about the potential consequences.  With the OPEC+ sticking to it guns, without increasing the output, the top consumers of oil turned to Venezuela to buy it on the cheap as the former was given a waiver to increase the production and then sell, provided that free and fair elections will be held before the waiver expires. Venezuela i
Read more

The Sun goes on Vacation: total solar eclipse - April 8, 2024

Image
Total Solar Eclipse: April 8, 2024: Vivax Solutions The lucky folks along a relatively narrow geographical band, from Mexico all the way to Canda, are going to witness a rare celestial spectacle on Monday, April 8 – a total solar eclipse. The path of totality – where people can witness total darkness - cuts across fifteen US states, before rolling into Canada in its final mesmerising leg. In mathematical proportion to the excitement, the enviably famous American entrepreneurial spirit has already gone into full swing: the hotel bookings, closer to the path of totality, have gone up exponentially and so have the prices; in addition, traders lost no time in springing into action in promoting related merchandise and of course, safety goggles, while implying that exercising caution before looking heavenward is a virtue, indeed.    The excitement that borders on ecstasy is perfectly understandable: astronomical charts show that there will not be another total eclipse for twenty years th
Read more

Latest Energy News from EIA