Saudi Arabia, competing with Russia, Iraq and Iran in the oil market, reduced last weekend the price of raw materials produced by it to maintain its share in the major Asian markets. About this newspaper The Wall Street Journal.
On Sunday, July 31, the Saudis lowered the price to Asian customers on the value of from 0.70 to 1.30 dollars per barrel, depending on grades of oil. Thus, the world price for crude oil was below $ 42 per barrel.
“The reduction has been made to ensure that Saudi Arabia remains competitive compared to sellers from countries in the Middle East and Europe,” said a source familiar with the discussions.
The decision to reduce prices was preceded by a negative for Saudi Arabia dynamics of the deduction of its share in the Asian markets. Iraq has overtaken the Saudis in the sale of oil to India, and in China, Riyadh is losing its position compared to Russian exports. In addition, Saudi Arabia is facing pressure from Iran, which has been canceled sanctions, previously preventing the supply of oil to world markets.
In addition, the source said that the decline in the price of Saudi oil is not only a competition but also a desire to stimulate demand in the weakened market of China.
2 August Brent crude for the first time since April fell below $ 42 per barrel and WTI crude oil fell to $ 39 per barrel.
At the OPEC summit on June 2 in Vienna, the cartel failed to agree on the freezing of oil production, which caused a drop in prices below $ 49 per barrel. Setback to the Doha meeting also in April, in which Russia participated. It was reported that the parties failed to agree because of the position of Iran, which did not want to freeze the fast-growing oil production.
