Saudi Arabia has increased its crude oil prices for Asian buyers by $ 0.40 a barrel and those for European and US buyers by $ 0.20 and $ 0.10 a barrel, respectively, Reuters reports. .
This means that the price of shipping in May for Saudi Arabia’s flagship Arab Light will cost Asian buyers $ 1.80 above the Oman / Dubai average, which is used as the basis for pricing. The Oman benchmark was trading above $ 63 a barrel at the time of writing, and Dubai’s contract was above $ 64 a barrel.
The news is unlikely to be welcomed by Saudi crude oil’s two largest buyers, China and India, especially India, which has spoken out against OPEC’s price increase efforts.
The third largest oil consumer in the world has repeatedly called on the cartel to stop production and lower prices. Meanwhile, it has been looking for alternatives to Middle Eastern oil.
“We have asked companies to aggressively seek diversification. We cannot be held hostage by the arbitrary decision of Middle Eastern producers. When they wanted to stabilize the market, we kept up with them, ”a government source told Reuters in early March.
India imports as much as 80 percent of the crude oil it consumes. About 60 percent of this comes from Middle Eastern producers. According to unnamed sources cited by Reuters, India could diversify into more US crude oil and crude oil from the world’s newest producer – Guyana.
Meanwhile, the government has asked refiners to review their contracts with Saudi Arabia and other Middle Eastern producers and use their collective bargaining power to get better terms, The Hindu reported this weekend.
China, meanwhile, is slurping cheap Iranian oil despite US sanctions and may not need to continue buying at last year’s rates, when crude oil was dirt cheap everywhere it came from.
By Irina Slav for Oilprice.com
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