Saudi Arabia’s oil exports to Asia increased in November, while Russia’s crude shipments to the region fell, driven by reduced demand from its main markets, China and India.
According to data from LSEG Oil Research, cited by Reuters columnist Clyde Russell, Saudi Arabia boosted its oil supply to Asia by 550,000 barrels per day (bpd) last month. This was partly due to improving Asian refining margins, a drop in the price premium of the Dubai benchmark over Russia’s Urals crude, and higher shipping costs for Russian oil.
Saudi exports to Asia reached 5.83 million bpd in November, up from 5.28 million bpd in October.
In contrast, Russia’s oil exports to Asia dropped by 450,000 bpd, falling to 3.51 million bpd in November from 3.96 million bpd in October, according to LSEG Oil Research data. Both China and India, Russia’s largest customers, reduced their imports of Russian crude, while imports of Saudi oil increased.
The increase in Saudi exports was likely influenced by a lower premium on the Dubai price benchmark over Russia’s Urals crude. Additionally, rising shipping costs from Russia’s western ports to India made Saudi oil more attractive.
Saudi Arabia was able to boost its sales despite raising the official selling price of its Arab Light grade for November shipments to Asia by $0.90 per barrel, bringing it to a premium of $2.20 above the Dubai/Oman benchmark, which is used to price Middle Eastern oil for the region.
Even with the price increase, Middle Eastern oil, including Saudi crude, has become more competitive in Asia compared to oil priced against the Brent benchmark, such as Russia’s Urals and crude from West Africa.
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