Saudi Oil Challenged in Asia by Delta and Cheap Alternatives
- Arab Medium and Heavy increased by 20c-30c/bbl m/m for Sept.
- Comparable U.S. and Russian grades becoming less expensive
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Saudi Arabia’s move to push up the cost of its oil in Asia may backfire as an outbreak of the delta virus variant in China damps demand, while the U.S. and Russia offer more competitively priced alternatives.
Saudi Aramco raised its Arab Medium and Heavy grades by 20 to 30 cents a barrel to the highest in at least four months for September sales to the region. While that’s less than the difference in the Dubai structure Aramco references in its pricing, demand for these medium and heavy-sour barrels may suffer as China battles an outbreak of the highly infectious Covid-19 strain.