Saudi Arabia aggressively slashed oil prices Saturday. Divorce can be bitter, especially when it is between two parties like Saudi Arabia and Russia that should have never got married. The collapse of OPEC+ after Russia walked away and said produce as much as you want is the inevitable result of tolerating a cheating spouse
Saudi Arabia state oil giant Saudi Aramco in a statement on Saturday announced it cuts its official selling price for April for all its crude grades to all destinations. Further more Saudi Arabia plans to ramp up output, to well in excess of 10m bpd.Keep in mind only a few days before Russian President Putin said Russia would honor and support OPEC.
New Aramco Prices
- Arab light crude oil to the United States cut to a discount of $3.75 per barrel, down $7 a barrel from March
- Northwestern Europe to a discount of $10.25 per barrel to Ice Brent, down $8 a barrel from March
A very swift end to the OPEC and Russia pact which expired without further agreement after 3 years in place.
Collapse of Oil Prices since COVID and Russian Saudi Price War
Back in 2017 the problems started for Saudi Arabia with the failure of oil to sustantially recover and Russia then overtaking Saudi Arabia as the leading exporter of crude to China the Kingdom began to grasp reality, well we thought. They stepped up talks with some of the world’s largest sovereign wealth funds and institutional investors for the Aramco IPO. In the end we saw a smaller IPO and only on the Saudi stock market.
Their were attempts to hold the price and that has been a failure, now a dramatic one. By listing shares on the Tadawul exchange that index is at the mercy of oil prices. Wasnt that what they were trying to get away from? Here we are a bitter price war and a collapsing oil price and stock price.
The Covid19 demand scare was not expected but what should have been expected was Russia’s betrayal of the agreement.after all did they ever honor the terms of the marriage? Did they ever lower production?
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Sources: Financial Times, WSJ, Ellen Wald, TC
From The TradersCommunity News Desk