April 20th, 2017 – Fort Russ News –
Saudi Arabia is aiming to expand its share in the world oil market by reducing oil prices to European consumers. Consumers to which Russia traditionally supplies its “black gold”.
For the second month, the largest state-owned oil company of the country – Saudi Arabian Oil – is utilising the policy of reducing prices for oil of all varieties for the North-West Europe and the Mediterranean, as well as some Asian countries. It is noteworthy that another company – Aramco – raised the prices for the United States.
Europe shows an oil demand growth over the past two years, which has not been observed since the mid-1990s.
During 2016, Saudi Arabia provided European countries with 42.5 million tons of oil, gas and raw materials for refineries in Europe, which are part of the Organization for Economic Cooperation and Development, and was ranked fourth after the former Soviet Union, Norway and Iraq.
Analysts note that for the last couple of years, the European market was not taken seriously by oil producers, but now that the market is showing decent growth, the demand cannot be excluded from consideration.
It is thought that Saudi Arabia would like to seize this opportunity and oust Russian oil from the market by lowering prices.
However, Russia has for a long time been aware of special pricing on the part of oil companies of Saudi Arabia, even before the OPEC countries agreed to reduce resource extraction.
The head of Russia’s largest oil company “Rosneft”, Igor Sechin, said in 2015 that Saudi Arabia is actively ‘dumping and expanding’ its presence in Europe, a traditional market for Russian oil.
However, experts consider it is likely that price wars will resume in Europe, which will mean that the production cuts agreement will not be extended to the second half of this year, said Rosneft in March.