US, WASHINGTON (NEWS OBSERVATORY) — Saudi Arabia is ready to sell oil to Europe at a price of $ 25 per barrel, Bloomberg learned. Previously, the kingdom’s supply volumes in this market were small, but now it is going to triple them. And at a price much lower than the Russian brand of oil Urals.
Saudi Arabia is ready to triple oil supplies to European countries that traditionally buy raw materials from Russia. The kingdom offers its oil at a price of $ 25 per barrel, which is significantly lower than the price of the Russian export brand Urals, said Bloomberg, citing sources.
According to the agency, at this price, Saudi Arabia wants to supply Arab Light brand oil to Rotterdam. Kingdom’s national oil company, Saudi Aramco, has sent European refineries proposals for limits on oil supplies, which, depending on the company, exceed traditional volumes by 25-200%, sources say. In particular, Royal Dutch Shell, BP, Total, OMV, Repsol and Cepsa received such offers.
The agency clarifies that large European refineries are a few days sailing from Egyptian Sidi-Kerir, where Saudi Aramco export vaults are located. The Saudi company also leases a storage facility for its oil in Rotterdam itself.
According to Amrit Sen, the chief oil analyst at Energy Aspect consulting company, Saudi discounts are so high that Arab Light will “squeeze out” Russian Urals and other flows of raw materials if their price does not fall in the same volume.
Last week, OPEC and Russia, failing to agree on a new reduction in oil production, broke off a deal that had supported prices since 2016. Soon after, Saudi Arabia began a price war , reducing the cost of its oil for importers in Europe, Asia and the United States by a maximum value for 20 years.
Bloomberg wrote that Riyadh privately told some market participants that if necessary it could increase oil production to a record level of 12 million barrels per day.
On Monday, the price of Brent oil futures immediately after the opening of trading on March 9 fell from $ 45 to $ 31.02 per barrel. On the same day, Bloomberg sources said that from April 1, when the agreement between Russia and OPEC on the reduction of production ends, Rosneft will begin to increase oil production.
This will be Russia’s first response to the price war launched by Saudi Arabia after the failure of negotiations in Vienna, the agency said. In general, from March 5 to 12, the price of Brent crude oil fell from $ 49.99 to about $ 35 per barrel, while at a minimum it cost $ 31.
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