Saudi Arabia lost to competitors the largest market of oil

Saudi Arabia moving away from its strategy of increasing sales of oil to the Asian markets and starts to give way to competitors in the hope of further price increase. Such conclusion analysts of Reuters Agency did on the basis of data on import of energy resources to the largest countries of South and East Asia.

So, for the first five months of 2016 (January-may) import of Saudi oil in China reached an average of 1.05 million barrels. a day. Growth in the same period in 2015 was 3.9%. While overall oil imports by China during these periods increased by 16.5%. In particular, in January—may of the current year Russia overtook Saudi Arabia, becoming the leading supplier of oil to China Russian imports amounted to 1.06 million barrels. per day (an increase of 42% compared to last year).

In India the situation was the same, only the opponents of Riyadh is not Russia, but Iran and Iraq. In January—may 2016 India imported crude oil from Saudi Arabia with an average speed of 856 thousand barrels. per day (an increase of 9.4% compared to January—may 2015). The growth of procurement from Iran between the aforesaid periods was 64.5%, to 334 thousand barrels. a day, and Iraq — 55%, to 892 thousand barrels. a day. Baghdad thereby bypassed Riyadh in the struggle for leadership in the Indian oil market.

In Japan, Saudi Arabia remains the leading supplier with 1.25 million barrels. a day. Growth in January—may 2016 the same period of 2015 was 12.6%. For its part, Iraq increased its oil supply to Japan 51%, although in real terms, the volume remains small — less than 72 thousand barrels. a day.

Finally, South Korea (fourth place in the Asia-Pacific region to oil consumption) bought Saudi oil 7% less than last year, while Riyadh remains the leading provider. On the contrary, Iran has increased oil exports to the Republic of Korea twice. In June, the volume amounted to 200 thousand barrels. a day.

“Despite oil overproduction and low prices, keep attention on such countries as Saudi Arabia because of its strategic importance that is expected of them action for the return of the balance of supply and demand as soon as market conditions improve,” said last week Minister of energy of Saudi Arabia Khalid al-falih.

According to Reuters, data on trade with Asian partners talking about the fact that Saudi Arabia has already started to prepare for a rebalancing of the markets, abandoning the previous plan to maintain their market share by any means. It may specify a June hike minimum prices for its crude oil Arab Light.

“The situation with minimum prices may indicate a paradigm shift in Riyadh: now they are even willing to cede a small piece of the market rivals, expecting that the market is already on its way to balance, and oil prices soon will grow significantly”, — notes the edition.

On the other hand, on Thursday, citing four people familiar with the situation Reuters reported that Riyadh has agreed with two unnamed customers in Asia to increase the supply of Arab Light next month. However, the volume of new sales is not yet known.