Sector News

Saudis Make Aggressive Oil Push in Europe

October 13, 2014
News
Days after slashing prices in Asia, Saudi Arabia is now making an aggressive push in the European oil market, traders say.
 
The kingdom is taking the unusual step of asking buyers to commit to maximum shipments if they want to get its crude.
 
“The Saudi push is not just in Asia. It’s a global phenomenon,” one oil trader said. “They are using very aggressive tactics” in Europe too, the trader added.
 
This month, state-owned Saudi Aramco stunned the rest of the Organization of the Petroleum Exporting Countries by slashing its November prices to defend its market share in Asia’s growing market. The move, setting a price war in the oil-production group, was combined with a boost in the kingdom’s output in September.
 
But Riyadh is also moving to protect its sales to Europe, a declining market where it is facing rivalry from returning Libyan production.
 
After cutting its November prices there, Saudi Aramco is also asking refiners to commit to full, fixed deliveries in talks to renew contracts for next year, the traders say. They say the Saudi oil company had previously offered a formula allowing flexibility of more or less 10% of contracted volumes, the most commonly used in the industry.
 
“They are threatening buyers” to discontinue sales if they don’t agree with the fixed deliveries, another trader said.
 
By Benoît Faucon, Sarah Kent and Summer Said 
 

Related News

August 23, 2019

The higher purpose of being a CEO

Borderless Leadership

When I left my second large company experience to become President of a small manufacturing company I did so driven by ego; I fancied the title. Soon enough I realized […]

August 23, 2019

As Brexit nears, Britain’s drugs, devices and pricing regulators seek the exit

Life sciences

Firm details on exactly how the U.K. will regulate new medicines is still to be decided after it leaves the EU later this year (caveats on timing abound), but we […]

August 23, 2019

The Simply Good Foods Company acquires Quest Nutrition for $1bn

Food & Drink

The Simply Good Foods Company, the owner of Atkins-branded food products, has secured a deal to acquire protein snack maker Quest Nutrition for $1 billion. Quest, which sells a range […]