Saudi Arabia raised crude oil prices for Asian buyers by $ 0.40 per barrel and cut European and American buyer prices by $ 0.20 and $ 0.10 per barrel, respectively, it said. Reuters, noting that the increase is for May cargo, compared to April prices.
This means that the price of May shipments to Arab Light – Saudi Arabia’s main product – will cost Asian buyers $ 1.80 above the Oman / Dubai average, which is used as a basis for pricing. The Oman benchmark was trading above $ 63 a barrel at the time of writing, and the Dubai contract was above $ 64 a barrel.
The news is unlikely to be welcomed by the two biggest buyers of Saudi oil, China and India, especially by India, which has vehemently opposed OPEC’s efforts to raise prices.
The world’s third largest oil consumer has repeatedly asked the cartel to stop cutting production and let prices fall. Meanwhile, it started looking for alternatives to oil from the Middle East.
“We ask companies to aggressively seek diversification. We cannot be held hostage to the arbitrary decision of producers in the Middle East. When they wanted to stabilize the market, we supported them, ”a government source told Reuters in early March.
India imports up to 80% of the crude oil it consumes. Of this total, around 60% come from producers in the Middle East. According to unidentified sources cited by Reuters, India could diversify into more U.S. oil and oil from the world’s newest producer – Guyana.
Meanwhile, the government has asked refiners to review their contracts with Saudi Arabia and other producers in the Middle East and use their collective bargaining power to get better terms, The Hindu reported this weekend.
In the meantime, China is swallowing cheap Iranian oil, despite U.S. sanctions, and may not need to continue buying at the rates it did last year, when oil was very cheap wherever it came from.
By Irina Slav for Oilprice.com
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