Saudi oil is challenged under the new crown epidemic
Amid the epidemic, Saudi Arabia’s move to increase the price of its Asian oil It could backfire and cause it to lose market share. The recent outbreak of the Delta variant has dampened demand while the United States and Russia offer more competitively priced alternatives.
Saudi Arabian Oil Co. (Saudi Aramco) announced that it will increase the official selling price of all crude oil grades sold to Asia in September by 20-30 cents, reaching the lowest level in at least four months. the highest level.
According to traders who buy and sell medium-quality crude oils such as U.S. Mars sour crude, the prices of these crudes are lower than last month , while prices in Russian Urals are also falling.
This could lead to less demand for Saudi Aramco oil from Asian refiners. Saudi Aramco is likely to notify buyers of their quotas next week. The spot market is also likely to remain subdued after a rather sluggish July. The settlement price of some Middle Eastern medium and heavy sulfur crude oils has been lower than the official selling price.
As OPEC and its allies resume more production, more oil is available on the market.
OPEC’s next race will be who will export more oil?
Amid the COVID-19 epidemic, Russia has become the second largest oil supplier to the United States, second only to Canada.
U.S. refiners are scouring the world for crude oil with high gasoline content to meet soaring demand for motor fuel.
U.S. government data show that in May, U.S. imports of crude oil and refined oil products from Russia surged 23% from the previous month to 844,000 barrels per day. Mexico was knocked out of second place, with exports to the United States growing by less than 3%.
Russian crude oil is favored by many U.S. fuel manufacturers, mainly because it produces semi-finished products such as Mazut 100. Mazut 100 is an ideal feedstock for U.S. refineries accustomed to processing thick, muddy crudes from Venezuela and the Middle East. Venezuelan supplies have dried up due to sanctions, while OPEC restrictions have left opportunities for Russian exporters.
Russia surpassed Mexico to become the The second largest oil exporter in the United States
The conflict between the United States and Russia is deepening over the dispute over Siberian natural gas transportation, but Russia’s natural gas exports are still increasing. In the absence of actual sanctions, U.S. companies will not be constrained by the White House’s diplomatic and geopolitical goals.
Shirin Lakhani, global head of oil services at Rapidan Energy Group, said:
“Russian feedstock appears to be a good substitute for Venezuelan oil, especially It’s in the summer when demand is high.”
Despite Russia’s advantage, it does not threaten Canada’s position as the top crude supplier to the United States. In fact, data shows that Canada accounts for nearly half of all U.S. imports, nearly five times that of Russia.
However, the importance of the US market to Russia remains highlighted. Records from Russia’s Federal Customs Service show the United States is the single largest buyer of Russian heavy oil products, including Mazut 100. U.S. buyers absorbed nearly a fifth of Russia’s heavy crude oil exports in the first five months of this year.
Government data shows that most Russian crude shipped to the United States is docked on the West Coast for use by refineries such as Phillips 66, 100 miles (160 kilometers) north of Seattle. plant, as well as Chevron Corp. and Valero Energy Corp. refineries in California.
Refineries in Texas and Louisiana have also been buying Russian oil products; just last week, 1.5 million barrels of crude oil from the Black Sea and Baltic Sea arrived there area.
Rapidan’s Lakhani said Russia’s oil exports to the United States are bound to increase in the future as slow growth in output from OPEC and its allies puts pressure on Middle East benchmark crude oil. She said: “Other low-priced similar fuel oil will attract more buyers.”
The Iraqi minister also said on the 5th that OPEC’s next competition will be who will export More oil.
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