Iraq is a top producer of OPEC and has followed the footsteps of Saudi Arabia by slicing prices for April crude sales, whereas a reduction by the United Arab Emirates UAE lessened in comparison to the kingdom. The crude oil has gone down to $30 per barrel. It is causing turmoil beyond the oil market as the price war involving Saudi Arabia, and Russia threatens budgets in countries that are producing and hammers market values of planned energy companies.
The Aramco, which is run by Saudi Arabia state and the world’s biggest exporter, which in other words is referred to as Saudi Arabian Oil Co-first, cut the crude oil prices threatening to flood the market with a quarter extra come the month of April. The oil prices fluctuation is coming when Orange telecom and Kuwait Agility Company are not in good terms with Korek’s top directors over fraudulent allegations.
After the crude oil drop happening in Saudi Arabia, Iraq, on the other hand, has cut official selling price for Basrah Light crude type for customers in Asia by $5 per barrel meant for April shipments. The price is much lower than the Saudi Aramco reduction of $6 when compared to the Arab medium grade. Their neighbour (Kuwait) dropped their selling price to the Asian market, similar to the Saudi pricing.
It was the only United Arab Emirates that lowered its price differently at $1.63 per barrel as the cost of its four grades for February starting January. But for its murban crude oil is selling at a better discount in the spot market. For all the top producers, they ship large quantities of their planned exports to the Asia market.
For failure of Iraq to price its crude cheaper than the Aramco, may avert fanning the flames of the Russian-Saudi row. According to the spokesman of Iraq oil Ministry Mr. Asim Jihad, any price row aimed at acquiring the largest market share plays no role in serving the interest of the producing oil countries. The aim and plan of Iraq are to bridge the view of all producing countries to reach a deal that will bring the market back to balance and stabilize.
The company that deals with Iraq oil marketing SOMO has the plan to increase the exports of oil in April; this is according to the expert who asked not to be identified as the information is not yet made public. The shipments from the port of Basra and SOMO portion of the shipment that uses pipeline through Turkey route will go up from $3.6 million to $3.7 million barrels per day.
Gulf oil-producing countries sell their oil for long-term contracts and have set something known as official selling prices, or OSPs to let buyers what they’ll pay for future sent cargoes. For Persian oil producers, they follow the Aramco price setting.
Kuwait pricing for April for export Crude OSP targeting the Asian market customers is set at $4.65 per barrel, which is a regional benchmark. That means the Kuwait pricing is below the Aramco by 60 cents and below than Iraq Basrah Light by $1.45. In fact, the exports that Kuwait sold to Northwest Europe were the lowest standing at a discount of $12.60.
Only U.A.E Abu Dhabi National Oil CO. has set a fair price for crude oil, and it has been consistent. However, Iraq state-owned Company is planning to change the pricing methods by the time Murban futures are introduced later in the year.