Iraq to cut the price of its oil from Saudi crude to increase its Asian market share
TUESDAY, MARCH 19, 2013 05:33
Singapore / London: Iraq sells that achieves rapid growth in oil exports ore at cheaper prices than any other types of debate and shows lower prices than being regional rival Saudi Arabia in order to capture a larger share in the Asian oil market.
After three years of oil expansion after decades of war and sanctions stepped Baghdad ranks third among the largest suppliers of crude oil to China, India and South Korea, which prompted Saudi Arabia to seek to protect its position in the forefront.
The sources said that officials from the oil company Saudi Aramco state oil discussed how to respond to the bold price levels offered by Iraq at a meeting to determine the strategy in London earlier this month.
A source familiar with the Saudi oil marketing policy "Iraq is increasing its production and we have to play very intelligently.
"We do not want to hurt ourselves."
To gain more customers in Asia stepped Baghdad steps to take advantage of the pricing policy and reduced Basra Light crude $ 1.10 per barrel compared to the Saudi Arabian medium crude and the biggest difference between Van in nine years.
Saudi Arabia responded to cut crude Arab average for two consecutive months, a move traders said and refining companies it aims to maintain the Kingdom's share in the market.
Said a trader at a Western company, "Saudis feel the pinch of it more than anyone else.
"It's a direct competition and this is why the Saudis to cut official rates for the sale to a large extent."
Perhaps the goal of the kingdom, which pumps about 9.2 million barrels of oil per day after the supply cut sharply near the end of 2012 is the identification of areas of control in the market ahead of OPEC meeting in Vienna on May 31.
Said a senior Western oil official "sharp price cuts and rumors about efforts to force refiners to take full contracted volumes thin is warning that Saudi Arabia would not give up its share of the market to make way for Iraq.
"But a long-term game and the Saudis appear to have much hope in the balance of the overall market at the present time."
Iraqi officials did not see from their side that Baghdad is fighting a battle with Riyadh to acquire on the market.
Officials want to develop Iraqi oil marketing policy sales do not threaten the growth of production, which began in 2010 after Baghdad has concluded contracts with international companies such as BP. BP, Eni and Exxon Mobil and Royal Dutch Shell.
The Iraqi oil official said, "we put a strategy to increase exports and make our customers happy and we are on the right track."
Iraq aims already exceeded Iran to become the second largest producer in the Organization of Petroleum Exporting Countries to increase average production to 3.7 million barrels of oil per day this year, compared with 2.9 million barrels per day last year.
That would be slightly lower than the highest level of production for Iraq at all of 3.8 million barrels a day recorded in 1979.
It seems that the high level of production target Baghdad and revelations Oil Minister Abdul Karim and coffee before the latest meeting of the Organization of Petroleum Exporting Countries in December shortly did not pass unnoticed on Saudi Arabia, the only producer in the Organization, which has significant spare capacity available.
The Gulf source said, asking not to be identified, "did not raise significant figure announced and coffee concern."
The growth in global demand 800 thousand to one million barrels per day and Baghdad can meet the new demand in full if you are able to achieve the targeted production level.
Iraq's exports jumped despite the fact that the country is still recovering from two decades of war and sanctions in addition to internal conflicts and constraints of export and dilapidated pipelines and other problems in the infrastructure and security.
Since the start of the expansion of the oil pump has increased production by more than 600 thousand barrels per day.
But Western Oil experts and Iraqis say that the constant bottlenecks suggest that Iraq's production will grow by about 300 thousand barrels per day on average probably this year.
The Gulf source said "the significant increase of Iraq has not yet been achieved so there is no real battle to acquire on the market now.
"But growth in excess of 500 thousand barrels per day would send a negative signal and could be called the battle."
The 11 percent of the total China's oil imports from Iraq in January in January 2013, up from 5.8 percent in 2012, while the share of Saudi Arabia's largest supplier of the second-largest oil consumer in the world 22 percent in the same month, up from 20 percent in the past year.
For India the share of Iraq to 14 percent of total oil imports in January, up from 13 percent in 2012. Saudi Arabia came in first place with 17 percent in January, up from 16 percent in 2012.
It is expected to achieve Baghdad, further gains as being India's Hindustan Petroleum Refining talks with France's Total to buy up to 40 thousand barrels per day from Basra in addition to its contract with Iraq to buy 60 thousand barrels a day, according to industry sources. It is believed to be the Total has offered a discount of ten cents to 15 cents per barrel for Iraqi official selling price.
The sources said that Hindustan plans at the same time reduce its imports from Saudi Arabia to 50 thousand barrels per day of 60 thousand barrels per day.
For South Korea, Iraq's progress degree to replace Qatar as the third largest supplier of oil in January.
Iraq has also benefited from the sharp cuts conducted by Asian buyers of Iranian oil with tighter Western sanctions on Tehran to get it to halt its nuclear program.
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