Saudi Arabia wants to be a part of the boom in the U.S. oil sector.
According to media reports, in February, it was planned that U.S. oil would be sent to Asia through a U.S. unit by the country’s state oil firm. However, the plan was discarded because the company found it to be economically unviable. The media reports quoted sources at two regional refiners in the kingdom.
However, there are speculation that Saudi Arabia could again reconsider moving American crude to Asia – the largest global market for crude. Such a business strategy would be something very new at a time when U.S. crude production is threatening to further increase the global oil glut and threatening to derail the attempt of OPEC and other oil producers to reduce the global over supply of oil and to increase crude prices.
According to media reports, the planning to shift U.S. crude to Asia was undertaken by the Aramco, the state-run Saudi oil company a d the largest oil producer in the world. The Saudi company intended to use its Houston-based Motiva Enterprises unit that runs a refinery in Port Arthur in Texas – the largest in North America. There has however been no comment made by Aramco.
In the last year or so, large oil consumers like China, India and South Korea have been importing the relatively cheap U.S. oil which has dented the market share of the established exporters to those countries such as those in Saudi Arabia. The tremendous production in crease in U.S. shale has already altered the movement of global cargo and Saudi Arabia is attempting to take advantage of it even though American oil is a relatively new thing for the Asian markets.
For the first time in over a year, the price of the benchmark U.S. oil surpassed the Middle East marker Dubai this week.
“At current levels, the strength in WTI relative to Dubai prices doesn’t justify arbitrage flows of U.S. crude into Asia,” said Nevyn Nah, an analyst at industry consultant Energy Aspects Ltd.
WTI in New York traded at $61.27 a barrel at 6:50 p.m. Singapore time. Since June, there has been a rise of over 40 per cent in prices.
According to media reports quoting shipment data, Aramco did not manage to finalize a deal with the Suezmax tanker AST Sunshine which was initially identified for carrying of U.S. crude oil from America to Asia. About 130,000 metric tons of crude was initially planned to be loaded on the ship for transportation in late February from the U.S. Gulf Coast, and to be offloaded at Singapore and Ningbo in China.
Aramco has already announced its intentions of enhancing business through purchasing and selling of crude other than that of Saudi Arabia even as the company is all set to launch its Initial Public Offering which is tipped to be the largest every IPO launch in history. This IPO is at the center of the plan of Saudi Arabia to move its economy away from dependence on oil.
(Source:www.bloomberg.com)
According to media reports, in February, it was planned that U.S. oil would be sent to Asia through a U.S. unit by the country’s state oil firm. However, the plan was discarded because the company found it to be economically unviable. The media reports quoted sources at two regional refiners in the kingdom.
However, there are speculation that Saudi Arabia could again reconsider moving American crude to Asia – the largest global market for crude. Such a business strategy would be something very new at a time when U.S. crude production is threatening to further increase the global oil glut and threatening to derail the attempt of OPEC and other oil producers to reduce the global over supply of oil and to increase crude prices.
According to media reports, the planning to shift U.S. crude to Asia was undertaken by the Aramco, the state-run Saudi oil company a d the largest oil producer in the world. The Saudi company intended to use its Houston-based Motiva Enterprises unit that runs a refinery in Port Arthur in Texas – the largest in North America. There has however been no comment made by Aramco.
In the last year or so, large oil consumers like China, India and South Korea have been importing the relatively cheap U.S. oil which has dented the market share of the established exporters to those countries such as those in Saudi Arabia. The tremendous production in crease in U.S. shale has already altered the movement of global cargo and Saudi Arabia is attempting to take advantage of it even though American oil is a relatively new thing for the Asian markets.
For the first time in over a year, the price of the benchmark U.S. oil surpassed the Middle East marker Dubai this week.
“At current levels, the strength in WTI relative to Dubai prices doesn’t justify arbitrage flows of U.S. crude into Asia,” said Nevyn Nah, an analyst at industry consultant Energy Aspects Ltd.
WTI in New York traded at $61.27 a barrel at 6:50 p.m. Singapore time. Since June, there has been a rise of over 40 per cent in prices.
According to media reports quoting shipment data, Aramco did not manage to finalize a deal with the Suezmax tanker AST Sunshine which was initially identified for carrying of U.S. crude oil from America to Asia. About 130,000 metric tons of crude was initially planned to be loaded on the ship for transportation in late February from the U.S. Gulf Coast, and to be offloaded at Singapore and Ningbo in China.
Aramco has already announced its intentions of enhancing business through purchasing and selling of crude other than that of Saudi Arabia even as the company is all set to launch its Initial Public Offering which is tipped to be the largest every IPO launch in history. This IPO is at the center of the plan of Saudi Arabia to move its economy away from dependence on oil.
(Source:www.bloomberg.com)
