Saudi Oil Buyers in Asia May Seek Alternatives After Price Hike
(Bloomberg) -- Asian oil buyers will likely purchase more U.S. and Middle Eastern crude on the spot market and may take less contracted supplies from Saudi Arabia after the kingdom hiked its prices to a record.Â
Omani crude was selling for $4 to $4.50 a barrel above its benchmark price on the Dubai Mercantile Exchange this week. That compares with the official selling price for Arab Light, which is now at a $9.35 premium to an average of Oman and Dubai prices. Long-haul flows from the U.S. have also become more viable following the announcement of the strategic reserves release.
See also: Collapse in Oil Curve Shows U.S. Release Has Calmed Market
The cost advantages mean many Saudi Aramco customers are unlikely to seek extra term supplies and may even opt to reduce volumes, while buying more from the spot market, according to traders. At least three Asian refiners said they were nominating regular volumes from Aramco this month, a change from a few weeks ago when some were requesting additional crude.Â
Crude has become cheaper on the spot market after the U.S. said it would drip-feed 1 million barrels a day of oil into the market for around six months. A cloudier demand outlook due to China's worsening Covid-19 outbreaks, as well as continued flows of Russian crude to Asia, have also pushed down premiums for Middle Eastern oil, making it more attractive than Saudi term supplies.
Aramco customers had urged the oil giant to try and keep a lid on price rises given the reserves release and the weaker Chinese demand, and were disappointed at the magnitude of the increase announced on Monday, the traders said. The buyers have to submit monthly nominations, requests for how much crude they want, to the Saudis by the end of Tuesday.
©2022 Bloomberg L.P.
-
Talking Points This Week: Tech Nerves, FII Buying, And A Faraway Banking Shock
The global markets are not shining this Diwali. The exception in the large markets is, India.
-
Midterm Rally Lasted A Day. The Hard Reality Of A Divided US May Last Two Years | Opinion
Between a contested AI boom, a debt ceiling that arrives in 2027 and a president with every incentive to act alone, the next two years may prove more volatile than the first day's rally suggests.
-
Blue Wave Will Derail the AI Trade but Won't Dismantle the AI Era | Unhedged Position
The Democrats' sweep of the US Congress will see politics collide with economic forces both over the long and short term.
-
It's Time To Take The GST Council's Bet On Trust Global
Payment records can prove India's services exports, and clear, proportionate rules can bring foreign digital sellers into the tax net.
-
Opinion | India at 38: From Innovation Overperformer to Innovation Powerhouse
India now has 453 VC-backed deep science startups, 18 of them late-stage, after 117 percent growth since 2020. Laurus Labs, at USD 9.3 billion, is the most valuable deep science company in any middle-income economy outside China.
-
Navigating Energy Crossroads: S Jaishankar's Call For Diversified Supply Chains At G20 Ministerial Meeting
As geopolitical fault lines continue to test maritime trade routes and commodity flows, Jaishankar's message remains pertinent: true economic resilience requires open markets, protected transit lines, and a genuine commitment to multilateral cooperation rather than coercion.
-
Indians Are Travelling, But Not Every Journey Is A Holiday | The Week In Whys
Pilgrims, patients and working women are the real travellers, and the system hasn't quite caught up with them.
-
Getting To Work Costs Women More | The Reason Why
It is not just about women paying more than men. It is about women paying much more in cities than in villages.
-
AI Bias In Investing Cannot Be Eliminated, But It Can Be Governed
Framing is a particularly important example as identical financial information presented in terms of gains rather than losses can lead an LLM to reach a different assessment.
