• 2 days PDVSA Booted From Caribbean Terminal Over Unpaid Bills
  • 2 days Russia Warns Ukraine Against Recovering Oil Off The Coast Of Crimea
  • 2 days Syrian Rebels Relinquish Control Of Major Gas Field
  • 2 days Schlumberger Warns Of Moderating Investment In North America
  • 2 days Oil Prices Set For Weekly Loss As Profit Taking Trumps Mideast Tensions
  • 2 days Energy Regulators Look To Guard Grid From Cyberattacks
  • 2 days Mexico Says OPEC Has Not Approached It For Deal Extension
  • 2 days New Video Game Targets Oil Infrastructure
  • 2 days Shell Restarts Bonny Light Exports
  • 2 days Russia’s Rosneft To Take Majority In Kurdish Oil Pipeline
  • 3 days Iraq Struggles To Replace Damaged Kirkuk Equipment As Output Falls
  • 3 days British Utility Companies Brace For Major Reforms
  • 3 days Montenegro A ‘Sweet Spot’ Of Untapped Oil, Gas In The Adriatic
  • 3 days Rosneft CEO: Rising U.S. Shale A Downside Risk To Oil Prices
  • 3 days Brazil Could Invite More Bids For Unsold Pre-Salt Oil Blocks
  • 3 days OPEC/Non-OPEC Seek Consensus On Deal Before Nov Summit
  • 3 days London Stock Exchange Boss Defends Push To Win Aramco IPO
  • 3 days Rosneft Signs $400M Deal With Kurdistan
  • 3 days Kinder Morgan Warns About Trans Mountain Delays
  • 4 days India, China, U.S., Complain Of Venezuelan Crude Oil Quality Issues
  • 4 days Kurdish Kirkuk-Ceyhan Crude Oil Flows Plunge To 225,000 Bpd
  • 4 days Russia, Saudis Team Up To Boost Fracking Tech
  • 4 days Conflicting News Spurs Doubt On Aramco IPO
  • 4 days Exxon Starts Production At New Refinery In Texas
  • 4 days Iraq Asks BP To Redevelop Kirkuk Oil Fields
  • 5 days Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw
  • 5 days Oil Gains Spur Growth In Canada’s Oil Cities
  • 5 days China To Take 5% Of Rosneft’s Output In New Deal
  • 5 days UAE Oil Giant Seeks Partnership For Possible IPO
  • 5 days Planting Trees Could Cut Emissions As Much As Quitting Oil
  • 5 days VW Fails To Secure Critical Commodity For EVs
  • 5 days Enbridge Pipeline Expansion Finally Approved
  • 5 days Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
  • 5 days OPEC Oil Deal Compliance Falls To 86%
  • 6 days U.S. Oil Production To Increase in November As Rig Count Falls
  • 6 days Gazprom Neft Unhappy With OPEC-Russia Production Cut Deal
  • 6 days Disputed Venezuelan Vote Could Lead To More Sanctions, Clashes
  • 6 days EU Urges U.S. Congress To Protect Iran Nuclear Deal
  • 6 days Oil Rig Explosion In Louisiana Leaves 7 Injured, 1 Still Missing
  • 6 days Aramco Says No Plans To Shelve IPO
Oil Fundamentals Overturn Geopolitical Risk

Oil Fundamentals Overturn Geopolitical Risk

Geopolitical risk from Iraq and…

New Tech Could Turn Seaweed Into Biofuel

New Tech Could Turn Seaweed Into Biofuel

Scientists discovered an unlikely abundant…

Saudi Arabia On Sales Offensive In Asia

Saudi Arabia On Sales Offensive In Asia

Saudi Oil Minister Ali al-Naimi says his country, which is already pumping oil at a near-record pace, is prepared to produce even more to satisfy what appears to be a rising demand in Asia, particularly China.

“Asian demand for oil remains strong, and we are ready to supply whatever is required,” al-Naimi, quoted by the Saudi Press Agency, said in a speech on April 27 in Beijing. “As the Asian population grows and as the middle class expands, so the demand for energy will increase. Oil will retain its preeminent position and Saudi Arabia will remain the number one supplier.”

Al-Naimi’s words are backed up by analysis issued by the energy news service Platts, which reported that Chinese demand for oil in March was 44.73 million metric tons, or 10.58 million barrels a day on average, 6.5 percent higher than in the same month in 2014.

Related: How Much Does OPEC Really Earn?

Still in Beijing the next day, al-Naimi repeated his message of increased demand for oil by Asia’s growing economies, but he added the caveat that “sudden rises or falls in the cost of oil are not welcome.”

Al-Naimi said such drops in oil prices, even when followed by small rallies, complicates the energy business in the long run, especially by stunting investments in the industry. “Oil is a long-term business, requiring long-term plans and investment,” he said.

Related: How To Spot An Undervalued Oil Company

Nevertheless, it is al-Naimi who is seen as the driving force behind the persistence of oil’s low price. The average global price of oil peaked at over $110 per barrel in late June 2014, but began to fall primarily because of a boom in US shale oil production, which often requires relatively expensive hydraulic fracturing, or fracking.

At its November meeting in Vienna, OPEC had the opportunity to cut production and was urged to do so by some of its members, but under al-Naimi’s leadership, the cartel decided to maintain output at 30 million barrels a day. Later al-Naimi stated the strategy was to regain market share by keeping prices low long enough to make US shale production unprofitable.

Related: Former BP Chief Sees Oil Price Rebound Soon

Saudi Arabia has adhered closely to al-Naimi’s plan. In March it produced a near-record 10.3 million barrels of oil per day, and the minister said output will probably stay at or near that level for some time, indicating, at least to some extent, that the Saudi strategy is working: It’s gradually restoring market share and making sure it has the supply to match demand.

“Saudi Arabia is a consistent, stable and reliable supplier of quality oil,” al-Naimi: “We are the most reliable supplier on earth. Quality and quantity is assured. We have proved over many years to be a reliable partner for China as its energy demands have increased. We remain committed to this partnership, and to this friendship.”

If al-Naimi’s words sound like a hard sell, they are. Saudi Arabia appears determined to go out and drum up more business rather than wait for customers to come calling. For example, last week he was in Seoul, doing his best to sell the South Koreans on the value – and quantity – of Saudi oil whenever they want it.

By Andy Tully of Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

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