Oil game going on in Saudi Arabia and Russia
Saudi Arab Oil Price News: Saudi Arabia has the world’s largest oil company, Aramco. India and China are the two largest oil buyers of Saudi Arabia. Recently, due to the declining economy amid the war with Ukraine, Russia reduced the prices of crude oil. This reduced the dependence of India and China on Saudi Arabia and started buying cheap oil indiscriminately from Russia. Now Saudi Arabia has also started playing the ‘oil game’ with Russia. Saudi Arabia has reduced the price of crude oil to the lowest in the last 27 months. Saudi’s largest oil company Aramco has reduced the prices of its flagship Arab Light crude oil for Asia. India is going to get a big benefit from this.
With this step of Saudi Arabia to reduce the prices of crude oil, Asian countries including India will now get cheaper oil and the cost of exporting crude oil will reduce. Aramco has reduced its crude oil shipments for February by $2 a barrel. Earlier in the month of December, Aramco had announced a cut of $ 1.5 per barrel for January shipment. Saudi Arabia, the world’s largest oil exporter, has reduced the price of its oil for North America, North-West European countries including Asia.
Why did Saudi Arabia suddenly start reducing prices?
Saudi Arabia, along with OPEC Plus countries, an organization of oil producing countries, was continuously cutting the production of crude oil. So that oil prices increase in the international market. But despite many efforts, oil prices did not increase. America many times asked Saudi Arabia to increase oil production, but when Saudi Arabia did not do so, America itself increased its oil production on a large scale. Not only this, along with America, non-OPEC countries like Brazil and Mexico also increased their oil production. Due to this, Saudi Arabia could not dominate the oil market and the availability of oil in the market became sufficient. Therefore, oil prices started falling.
Asia is a big market for Saudi Arabia. Countries like India and China which are the biggest oil consumers of Saudi Arabia. If they also start buying comparatively cheaper oil from other countries on a large scale, then who will question Saudi Arabia? Due to this, Saudi is forced to reduce oil prices.
Russia is also a big factor
The special thing is that ever since the war with Ukraine started and western countries imposed economic sanctions on Russia, Russia has offered very low prices of crude oil to countries like India and China. India, which used to buy less than 1 percent of oil from Russia before the war, is now buying oil from Russia indiscriminately. Now Russia has become India’s largest oil supplier by overtaking Saudi Arabia. This is the reason why now out of compulsion, Saudi Arabia is reducing the oil prices, which will definitely benefit India.
Latest World News