Asia accounts for roughly two-thirds of Saudi oil exports. FMTNews Oil Saudi
SINGAPORE: The opening battle of the global oil price war got under way in Asia as some of the world’s biggest buyers said they’d try to buy more Saudi crude than planned in April after the exporter offered them unprecedented discounts.
The scope to buy more may be limited in April because they’ve largely secured the oil they need for the month, the refiners said, but should the Saudis continue to offer steep discounts into May, they’re ready to take even more at the expense of other suppliers. Within hours of talks collapsing in Vienna, the Saudis slashed their official prices by the most in more than 30 years and signalled to buyers it would ramp up output – a declaration of intent to flood the market with crude.
For March they requested less oil as the coronavirus weighed on demand, prompting a reduction in refining across Asia and leading to cheaper crude being available in the spot market. “We’ve been considering additional run rate cuts, but we’re now in deep deliberation on whether to proceed. We’ll assess the overall fuel demand picture first.”
While they were the first movers, the Saudis won’t be alone in offering discounts, with traders expecting similar cuts from other major suppliers like Kuwait, Iran and Iraq in coming days.
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