Asia is seen as the center of global oil demand growth. According to the latest report of the International Energy Agency, by 2023, with the surge in oil demand in Asia, global oil production may exceed 100 million barrels per day; and by 2025, Asia will account for 90% of the growth in global oil demand. Saudi Arabia, the world’s largest oil exporter, will naturally not miss such a “treasure land”. However, the country has recently increased production and prices. What is its plan?
Saudi Arabia is partial? Comprehensively raise the price of crude oil in the Asian market!
According to the Financial Associated Press, on April 4, local time, Saudi Aramco fully increased the price of crude oil to Asian customers. Specifically, the price of light crude oil and ultra-light crude oil exported by Saudi Arabia to the Asian market in May was increased by US$0.4/barrel, which is US$1.8/barrel higher than the benchmark oil price; the price of extra-light oil was increased by US$0.2/barrel; the price of medium crude oil was increased by US$0.2/barrel. Crude oil and heavy crude oil prices increased by US$0.5/barrel. The report pointed out that this implies that Saudi Arabia is confident in Asia’s economic recovery and is optimistic that Asia’s crude oil demand will increase significantly.
However, while Saudi Arabia raised prices for Asian customers, the price of crude oil in the US and European markets fell slightly. For example, in May, the prices of light crude oil, medium crude oil and heavy crude oil exported by Saudi Arabia to the United States were all reduced by US$0.1/barrel; the price of light crude oil for most northwest European customers will be reduced by 20 cents, which is lower than the benchmark oil price. US$2.4/barrel. At this point, the price of Saudi crude oil exported to Asia has been higher than the price in the U.S. and European markets for several consecutive months. According to its explanation, this is because the recovery of energy demand in these two markets is slow.
It should be noted that as Asian crude oil demand recovers, OPEC+ announced on April 1 that it will increase production “restrainedly” in the next few months; Saudi Arabia also gradually withdraws its voluntary production cut of 1 million barrels /day commitment to reduce production by 250,000, 350,000, and 400,000 barrels per day respectively from May to July. In other words, in the next three months, Saudi Arabia will increase its oil supply by more than 2 million barrels per day, equivalent to a quarter of OPEC+’s current production cuts.
So why did Saudi Arabia increase production and raise prices? Are you still “biased” and only increase the price for Asia? Aren’t you afraid that Asian customers won’t buy it? U.S. media quoted analysts as saying that Saudi Arabia’s move was an attempt to appease other oil-producing countries that want to increase production so that Saudi Arabia can maintain control of the oil industry for a longer period of time.
In addition, Saudi Arabia’s crude oil exports have increased for the sixth consecutive month in March, rising from 6.35 million barrels per day in November to 6.495 million barrels per day, a record high in 2020. The highest since April. Some voices pointed out that judging from various signs, Saudi Arabia is “ready to make a move” and is preparing to start a big war.
Bypassing petrodollars, 30 million barrels of Iranian crude oil come to China!
As we all know, the United States and Saudi Arabia reached a petrodollar agreement in 1974. Oil trade between various countries requires U.S. dollar payments through the SWIFT system. With the strong position of the U.S. dollar, the U.S.’s voice has grown stronger. , and even initiated restrictions on oil-producing countries such as Iran, Russia, and Venezuela, causing these countries’ foreign oil trade to encounter obstacles at every turn, and no one dared to buy.
According to previous reports by Lianhe Zaobao, although the United States has imposed oil trading restrictions on Iran and required countries to reject Iranian oil, China still imports a large amount of cheap Iranian oil, a record-breaking amount record. A trader familiar with Iranian ship movements pointed out that cargoes sent to China in March were as high as 30 million barrels.
It is worth mentioning that on March 27, China and Iran signed a 25-year China-Iran comprehensive cooperation agreement in Tehran. According to British media, China will invest US$400 billion in Iran over 25 years to help the country re-emerge.
In return, according to the previously circulated draft agreement, Iran will provide China with a stable supply of oil within the next 25 years; China will also enjoy substantial discounts when purchasing Iranian energy products; and China Iranian oil trade will be settled using RMB or digital RMB, which will undoubtedly pose further challenges to petrodollars. </p
