In the first half of this year, international oil prices rose wildly, reaching a price of US$76 per barrel. Saudi Aramco, the world’s largest oil producer, has made a lot of money. The giant’s profit in the second quarter reached US$25.5 billion (approximately 1,646 US dollars). billion), a surge of 288% compared with the same period last year. However, in the second half of the year, international oil prices lacked stamina and began to turn downward. In order to retain more customers, Saudi Aramco significantly lowered oil prices.
This past weekend, Saudi Aramco informed its customers that it will significantly reduce the prices of all grades of oil products sold to the Asian market in October – the Asian export price of Arabian light crude oil has been reduced. US$1.30/barrel, more than twice the previously expected price cut of 60 cents/barrel.
At the same time, the price of crude oil sold by Saudi Aramco to the United States and Europe has remained stable, indicating that the giant is interested in prioritizing the needs of Asian customers. According to it, Asian buyers Crude oil orders for October need to be submitted by this Monday. Analysts pointed out that Saudi Aramco’s move may be a competition to maintain market share.
After all, the current global oil supply is sufficient. On the one hand, in early September, OPEC+ began to fulfill its promise to gradually increase oil production as planned, claiming to increase production by 400,000 barrels per day per month in the second half of this year. On the other hand, in order to lower oil prices, the U.S. Department of Energy will auction 20 million barrels of crude oil reserves for delivery in the fourth quarter of this year. This sale will hit the highest level since 2014.
In addition, in order to curb the accelerated spread of the Delta virus, many Asian economies have adopted a new round of epidemic prevention measures, which has suppressed global crude oil demand to a certain extent. According to the IEA, global crude oil demand will be reduced by 550,000 barrels per day in the second half of this year due to the critical attack of the Delta virus.
It is not difficult to understand why Saudi Aramco gives special “preferential treatment” to Asia, the center of global crude oil demand growth. In the case of shrinking demand, if If Saudi Arabia continues to sell expensive oil, it is likely to lose a large number of customers.
In fact, even if Saudi Aramco significantly reduces the price of crude oil sold to Asia, the giant can still make a lot of money. Although the delta virus attack caused the international oil price, which was close to US$80 in the first half of the year, to fall back to around US$70. As of 11:00 on September 6, US crude oil was US$68/barrel and Brent oil was US$71/barrel. Saudi Aramco, which has low oil production costs, is still the “winner”. It is understood that its comprehensive average cost of crude oil is 15-19 US dollars per barrel.
On the other hand, the cost of US shale oil extraction is high, about US$40-90/barrel. In addition, when the oil price collapsed last year, many US shale oil companies were burdened with debt and signed contracts They obtained ultra-low-price sales contracts, so that when oil prices soared in the first half of this year, they suffered huge losses. According to statistics, the losses of U.S. shale oil companies in the past six months have reached 7.5 billion US dollars (approximately 48.4 billion yuan).
Therefore, U.S. shale oil companies do not dare to rashly exploit and increase production. To make matters worse, at the end of August, Hurricane Ida severely damaged the heart of the U.S. energy industry, causing tornadoes and floods wherever it went, and many oil plants suffered catastrophic damage. In order to alleviate the situation of no oil available in some areas, Biden also ordered the Department of Energy to lend 1.5 million barrels of crude oil last Thursday.
But it is both auctioned and lent. As of August 13, the strategic crude oil reserves in four underground caves in the United States were 621 million barrels, the lowest since August 2003. value. </p
