Saudi cuts crude oil prices again amid growing competing supplies

Saudi Arabia has reduced premiums on its monthly price of benchmark term crude oil, a pricing bellwether for other West Asian suppliers, for a second consecutive month (for February deliveries), shrinking them to the lowest level since the pandemic of 2020, a pricing document released on Tuesday shows.

- S DINAKAR

An emerging trend in lower premiums for Saudi Arabian oil and, by extension, cheaper oil from other suppliers like Iraq and the United Arab Emirates, translates into huge annual savings for Indian refiners, analysts said.

This comes amid the International Energy Agency forecasting a supply this year of 4 million barrels per day, equivalent to 70 per cent of India’s oil demand.

While the American bombings of Venezuela over the weekend to abduct President Nicolas Maduro were perhaps not considered while notifying Saudi prices for February, resuming Venezuela’s export will have a bearing on the pricing of West Asian suppliers, senior sources in refining companies said.

The last shipment from Venezuela to Reliance Industries’ Jamnagar refinery, of 2 million barrels, was in May last year, the Kpler data showed.

India’s import of Venezuelan oil reached an all-time high of 583,000 barrels a day in November 2014, before Venezuela came under sanctions.