Indian oil refiners benefit as Gulf battles for buyers

Indian OilMideast producers enjoyed decades of dominance supplying Asia (AP)

Middle East oil exporters are locked in an increasingly fierce battle for the world's fastest-growing markets in Asia, as producers worldwide ship more crude east to compensate for shrinking demand from the United States and Europe.

The fight for the trillion-dollar Asian oil market has ended decades of comfortable dominance for Middle East producers, who faced so little competition that refiners in Asia complained of being charged a premium of a dollar or so per barrel above what buyers in Europe or the Americas paid.

The picture has changed as rising US shale supply has sapped demand in the world's largest crude consumer for the imports it previously bought from Latin America and West Africa. In Europe, years of shaky economic performance and increasing fuel efficiency have shrunk Russia's traditional market.

With nowhere else to expand, producers are pushing for more sales in Asia. The competition will become even stronger if sanctions on Iran are lifted in coming months and the million barrels per day (bpd) in Iranian exports that have been choked off returns to the market.

Under sanctions, Iran fuelled the competition by offered discounts, easy credit and free shipping to keep oil flowing. If sanctions are lifted, it may have to be even more aggressive to regain market share.

Amid these shifting market pressures, the Organization of the Petroleum Exporting Countries meets on Wednesday to consider adjusting its output target of 30 million bpd.

With oil prices well above $100 a barrel, OPEC is likely to leave the target unchanged for now, say delegates who will attend the meetings in Vienna.

"These market dynamics - rising Iraqi output, increase in non-OPEC production, particularly in North America, and the potential return of Iran over the longer term - are going to put downward pressure on oil futures and OPEC producers will face an increasing challenge going forward," IHS oil consultant Victor Shum said.

... contd.

Please read our terms of use before posting comments
TERMS OF USE: The views, opinions and comments posted are your, and are not endorsed by this website. You shall be solely responsible for the comment posted here. The website reserves the right to delete, reject, or otherwise remove any views, opinions and comments posted or part thereof. You shall ensure that the comment is not inflammatory, abusive, derogatory, defamatory &/or obscene, or contain pornographic matter and/or does not constitute hate mail, or violate privacy of any person (s) or breach confidentiality or otherwise is illegal, immoral or contrary to public policy. Nor should it contain anything infringing copyright &/or intellectual property rights of any person(s).
comments powered by Disqus