Middle Eastern Oil Producers Staggering  – The Oil Saga Continues
1 year ago by Jack Evangelides

Middle Eastern Oil Producers Staggering – The Oil Saga Continues

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In light of recent events held in Vienna by OPEC, the competitiveness of the oil industry is drastically increasing. The United States initially opposed the deal proposed by Saudi Arabia which would increase the price of oil, however, they have found newer means to keep up their profits and expand their business. Light oil, typically pumped in the shale fields of the U.S, is gradually, and increasingly, making its way to Asia. This market is typically dominated by Saudi Arabia, so what effects may this have? Can the Middle East keep their reliance on Oil? How can you invest safely into booming markets? The Dilemma OPECs consensus to reduce output to raise the prices of oil has recently been battled by hard line competition of American Crude oil. American Crude has increased its stand in the Asian markets, traditionally dominated by Saudi Arabia. This imposing factor has forced OPEC to controversially lower their prices for lighter crudes in order to defend their market share.
“It is no surprise that Middle Eastern producers are having to cut light crude prices,� - Virendra Chauhan, an analyst at industry consultant Energy Aspects Ltd.
While Middle Eastern producers are reducing their pricing to fight competition brought on by the U.S, American exports to the Asian nations are surging, with a main focus in India and South Korea.  Effects are being experienced such as: state-owned Abu Dhabi National Oil Co cutting the premium for 2019 supplies of Murban crude. Cuts were from 16-18 cents a barrel over its monthly official selling prices, down from an estimate of 25 cents in 2018. Additionally, Saudi Aramco dropped the premium of its Arab Extra Light grade to the lowest level in 16 months. It is no surprise that average exports of US oil products has risen ‘7% in 2018` – Department of Energy. Despite a rise in influence in the Asian markets by the U.S, it is still dominated by Middle Eastern producers. Competition has risen, however, we are yet to see the long-term effects of this cause and we await any retaliation. It is likely that competitive pricing may need to be adjusted in favour of the Middle Eastern oil producers. However, it is important to understand the significance of oil in recent times. The aftermath of the Vienna conference (see my previous article here) portrays the competitiveness and volatile nature of the oil market, yet it is an affluent one. If you are exporting or importing oil, it is important to understand your customer or supplier and to have the correct data to allow you to push your product into a new region. Expand your Awareness It is essential to comprehend what you can do to increase business while mitigating risks. A pivotal factor in any business arrangement is to know your customer. Assess the risk of working with a company through Cedar Rose. Our credit reports come with a visual CR Score calculation that presents a representation of how risky it would be to extend credit to your chosen company. Furthermore, depending on your chosen report, you can find additional information that will provide you with the necessary knowledge to mitigate risk and enhance your business. From corporate records to bankruptcy checks, a simple KYC check to enhanced due diligence, Cedar Rose can source that all important data that will allow you to take the necessary steps for your company. Stay informed with Cedar Rose, your award-winning business intelligence service. Written By Jack Evangelides, Marketing Intern Sourced Image: Pexel *** The sole purpose of the article above is to generate public discussion, it has no intention to constitute legal advice. ***