Saudi Arabia is weighed down by Russian, Iranian and Iraqi crude exports to the Asian market, The Wall Street Journal reports. As a result, the kingdom had to cut its oil prices.
The price cut for September delivery comes after two years of production at maximum levels by Saudi Arabia. The country intends to maintain its market share and to show it is still competitive.
Last Sunday, on August 7, Saudi Arabia decreased its oil prices for Asian customers by between 70 cents and $1.30 a barrel, triggering the global crude price fall below $42 a barrel.
Saudi Arabia’s Indian market share was less than that of Iraq’s. In the second quarter, Iraq exported 11 million metric tons of oil to India, a million more than Saudi Arabia. Last year, Saudi Arabia’s India exports exceeded Iraq’s shipments by 900,000 tons.
In China, Russian exporters are leading. Russian crude exports to China rose by 9% to 4 million metric tons in June from the prior year. This year, Chinese oil consumption is seen to increase by 280,000 barrels a day.
In addition, Saudi Arabia has been under pressure from Iran, its political rival. After a lifting of Western sanctions from Iran, the country’s oil output has sharply increased. It reached 3.64 million barrels a day in June.
