• 5 minutes Closing the circle around Saudi Arabia: Where did Khashoggi disappear?
  • 10 minutes Iranian Sanctions - What Are The Facts?
  • 15 minutes U.N. About Climate Change: World Must Take 'Unprecedented' Steps To Avert Worst Effects
  • 7 hours Can the World Survive without Saudi Oil?
  • 2 hours WTI @ $75.75, headed for $64 - 67
  • 19 hours Sears files Chapter 11
  • 20 hours Natural disasters and US deficit
  • 16 hours China Is the Climate-Change Battleground
  • 4 mins Censorship has a price: Google’s CEO Defends Potential Return to China
  • 2 hours Saudis Threaten Retaliation If Sanctions are Imposed
  • 6 hours Porsche Says That it ‘Enters the Electric Era With The New Taycan’
  • 41 mins $70 More Likely Than $100 - YeeeeeeHaaaaa
  • 1 day Nothing new in Middle East? Iran Puts On 'Show Of Strength' Military Exercise In Gulf
  • 1 day Threat: Iran warns U.S, Israel to expect a 'devastating' revenge
  • 8 hours How High Can Oil Prices Rise? (Part 2 of my previous thread)
  • 35 mins Who's Ready For The Next Contest?
Alt Text

Trump Threatens Iran’s Oil Clients

Trump has directed yet another…

Alt Text

US Demands For More Oil Could Backfire

The State Department’s request for…

Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing for news outlets such as iNVEZZ and…

More Info

Trending Discussions

Saudi Arabia Alters Oil Pricing To Attract European Buyers

Rigs

Saudi Arabia is trying to lure buyers from European markets by changing the way it prices its oil in order to make it easier for hedging, Reuters reported on Tuesday, quoting industry sources. 

As of July 1, the Saudis will begin pricing their oil sales to Europe against the ICE settlement for the Brent benchmark, instead of the Brent Weighted Average (BWAVE) that it has been using so far.

“The Saudis are switching to the settlement as BWAVE is difficult to hedge,” an industry source told Reuters.

Following consultations with customers, the move will become effective July 1, Aramco said in a letter to customers obtained by Bloomberg.

That change in the way pricing is formed “is expected to provide substantive benefits, including allowing our customers to closely hedge crude purchases,” according to the Aramco letter.

Saudi Arabia is not the only Middle Eastern producer to consider a tweak to the pricing method in a bid to make its oil more attractive to European buyers. Related: This Non-OPEC Member Just Called For An Extension Of The OPEC Deal

As of late 2015, state-run Kuwait Petroleum Corporation (KPC) began pricing its crude sales to Europe using dated Brent and abandoned the BWAVE-based pricing that Saudi Arabia and Kuwait had been following.

Iraq also prices its European exports against dated Brent, while Iran prices crude sales against BWAVE, but according to Bloomberg, Iran has replicated Saudi Arabia’s pricing moves in the past.

While it is changing its pricing methods for Europe, Saudi Arabia is trying to keep its Asian market share intact amid the OPEC production cuts. The Saudis are likely to reduce the official selling price for their Arab Light crude grades bound for Asia in May, as they are faced with abundant supply of light oil in Asia and weaker demand amid some seasonal refinery maintenance.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:




Back to homepage

Trending Discussions


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News