As the anti-Russian sanctions came into force, many international buyers turned down oil deals with Moscow. So, now Russia has to sell its crude at record-low prices to stay competitive in the market. This, in turn, influences other major market players who are also forced to cut prices. It seems that the US plan to make oil cheaper is working. Not only is Saudi Arabia considering an increase in oil production but it is also slashing the cost of its flagship grades to compete with Russia. The kingdom has to offer its crude at steep discounts as flows of cheap Russian oil create intense competition. According to Bloomberg, the Saudis are selling their Arab Heavy and Arab Medium grades at the largest discount to Arab Light since 2014. China and India are usually the main importers of discounted crude. However, they have increased purchases of Russian oil. Iran also joined the sale and lowered the price of its already discounted oil to compete for customers in China. Likewise, Venezuela had to follow suit and offer its crude at a record discount.
