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Saudi Arabia plans to increase oil production in response to failure of OPEC deal with Russia

Source : 112 Ukraine

Saudi Aramco offered record discounts on some types of crude oil
21:24, 8 March 2020

Businessinsider.com

Saudi Arabia plans to increase oil production in April in response to the failure of the OPEC + deal with Russia. This is reported by Bloomberg.

On March 7, Riyadh reduced the price of oil that it sells to foreign markets by maximum in the last 20 years, trying to induce oil refineries in Europe, Asia and the United States to buy Saudi oil by unprecedented discounts.

A few hours after the failure of the negotiations in Vienna, Riyadh lowered the so-called official sales prices by offering record discounts on some types of crude oil that it sells around the world, the agency writes with reference to a copy of the price offer.

State oil company Saudi Aramco once a month tells refiners the price at which it will sell its oil, usually adjusting it from a few cents to a couple of dollars, the agency explains. But on March 7, the company informed customers that it was cutting official prices by $ 6–8 per barrel in all regions.

Related: OPEC, Russia discuss oil production cut amid spread of coronavirus

In particular, Saudi Aramco offered a discount of $ 8 per barrel for its Arab Light brand oil for refineries in northwestern Europe. The price of a barrel of this oil was $ 10.25 lower than Brent crude. Russian Urals oil is offered at a discount of $ 2 per barrel to Brent oil prices.

Riyadh’s decision can also affect other Gulf countries that export 14 million barrels of oil daily: usually producers in the region follow Aramco, the publication concludes.

We recall that the OPEC + countries at the negotiations on March 6 were unable to agree and extend the agreement to reduce oil production. The current transaction will cease to be effective on April 1. After that, all restrictions on oil production in the OPEC and non-OPEC countries will be lifted. The increase in oil production by Russia will depend only on the plans of oil companies. The stumbling block in the negotiations was the position of Moscow, which refused to deepen restrictions. Without Russia's participation, OPEC countries do not see any reason to continue to artificially limit production.

Related: Belarus struggles to find alternative oil supplies as standoff with Russia lingers

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