Saudi Arabia has announced that it will flood global oil markets with an additional 2.3mn b/d-plus of highly discounted crude oil in April. After the 6 March breakdown of attempts to engineer ‘Opec+’ output cuts (MEES, 6 March), Saudi Arabia wasted little time in switching track and laying down the gauntlet to rival suppliers.
On 8 March Saudi Aramco issued crude official selling prices (OSP) that cut prices for April-loading cargoes by record amounts versus respective benchmark grades. Key Asian prices were cut by $6/B, those to the US by $7/B and European prices by an eye-watering $8/B (see chart and MEES, 13 March for full data). And, of course, these prices are versus benchmarks that are already sharply down (MEES, 13 March). With Brent hovering around $35/B as MEES went to press, Arab Medium’s $12.60/B discount for deliveries to northwest Europe implies an outright price below $24/B, possibly testing the lows plumbed in January 2015 when Brent averaged $29/B but the discount was a modest $4.70/B. (CONTINUED - 1461 WORDS)
