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Saudi Arabia and Iran reignite the oil price war

 
Published time: 14 Aug, 2018 13:14 Edited time: 14 Aug, 2018 14:21
Saudi Arabia and Iran reignite the oil price war
Saudi Aramco's Ras Tanura oil refinery and oil terminal in Saudi Arabia © Ahmed Jadallah / Reuters
The rivalry between Saudi Arabia and Iran is becoming increasingly evident in the oil pricing policies of the two large Middle Eastern producers.

The two countries are currently reigniting the market share and pricing war ahead of the returning US sanctions on Iranian oil.

Saudi Arabia, OPEC’s largest producer, has been boosting oil production to offset supply disruptions elsewhere, including the anticipated loss of Iranian oil supply after US sanctions on Tehran return in early November. The Saudis are also cutting their prices to the prized Asian market to lure more customers as they increase supply.

Iran, OPEC’s third-largest producer, is trying to convince its oil customers to continue buying Iranian oil despite stringent US efforts to curb Iranian production.

Iran has slashed its official selling prices (OSPs) for all grades to all markets for September, looking to monetize what could be its last oil sales to some markets in Asia before the U.S. sanctions kick in. Tehran cut the prices for its flagship oil grades to more than a decade low compared to similar varieties of the Saudi crude grades, according to data compiled by Bloomberg.

Last week, the National Iranian Oil Company (NIOC) slashed the OSP for the Iranian Light crude grade to Asia by $0.80 to $1.20 a barrel above the Dubai/Oman average, used for pricing oil to Asia. The September prices for Iranian Light to Asia are at a 14-year-low compared to the similar Saudi grade sold to the world’s fastest-growing oil market, Bloomberg has estimated.

Earlier this month, the Saudis also slashed the September prices to Asia for their flagship grade, Arab Light, by $0.70 to $1.20 a barrel premium over the Dubai/Oman average. The reduction was slightly deeper than expected and the second consecutive monthly cut in pricing. The Saudis cut the prices for all their grades to all markets except for the United States.

Now Iran is also slashing prices for all grades to all markets, with the prices for Iranian Light, Iranian Heavy, Forozan, and Soroush grades to Asia, Northwest Europe, and the Mediterranean all cut by between $0.50 and $1.45, depending on the market and grades.

Read more on Oilprice.com: Who Profits From Iran’s Oil Major Exodus?

The OSPs for Iranian Heavy and Forozan to Asia were slashed against the similar Saudi grades to their lowest levels since at least 2000, the year in which Bloomberg started compiling the data.

Iranian Light and the Saudi Arab Light for Asia for September are now priced at the same level—$1.20 a barrel above the Dubai/Oman average.

For the Saudis, the cut is aimed at enticing more buyers in order to take advantage of the refiners in Asia that are looking to cut Iranian oil intake for fear of running afoul of the US sanctions. For Tehran, the cut in prices is an attempt to keep refiners buying by offering yet another incentive for them on top of the extended credit periods and nearly free shipping.

It has also been reported that Iran has started to offer India—its second-biggest oil customer after China—cargo insurance and tankers operated by Iranian companies as some Indian insurers have backed out of covering oil cargoes from Iran in the face of the returning US sanctions on Tehran. 

India’s imports from Iran could start to slow from August as some big Indian refiners worry that their access to the US financial system could be cut off if they continue to import Iranian oil, prompting them to reduce oil purchases from Tehran.

Read more on Oilprice.com: Can China Afford To Slap Tariffs On U.S. Oil?

The US hasn’t been able to persuade Iran’s biggest oil customer China to reduce oil purchases, but Beijing has reportedly agreed not to increase its oil imports from Iran.

Other relatively large Asian buyers of Iranian oil—South Korea and Japan—are looking for US guidance and (possibly) waivers before deciding how to proceed, but they are currently very cautious and on the lookout for alternative supplies.

Analysts, and reportedly the US Administration itself, currently expect the sanctions to remove around 1 million bpd from the oil market.

Considering the intensity of efforts by the U.S. to cut off as much Iranian oil exports as possible, it is unlikely that even Iran’s significant discounts to Asian customers will save the country’s oil exports.

This article was originally published on Oilprice.com

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Military targets in Hama & Aleppo, Syria hit by missiles – state TV

 

Published time: 29 Apr, 2018 21:24 Edited time: 29 Apr, 2018 23:47Richards News OnLine

Military targets in Hama & Aleppo, Syria hit by missiles – state TV
Screen shot from a footage showing large explosion at a Syrian military base in the province of Hama following reports of a missile attack © / Ruptly
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Powerful explosions have been heard in the countryside of Hama and Aleppo provinces, the Syrian state news agency reports. The state media says military bases there were hit by rockets launched by an unspecified enemy.

The alleged attacks were reported by Syria’s Sana news agency on Sunday evening. Citing a military source, it said that “a new aggression with hostile missiles” took place at around 10:30 pm local time, targeting military positions in the Hama and Aleppo villages.

A Syrian law enforcement source told RIA Novosti that the army’s munition depots were hit, in what was most likely an airstrike.

The source said one of the targeted military sites was a munition depot belonging to the Syrian Army's 47th Brigade. A fire at the depot broke out as a result of the attack, he said. Another target was reportedly a munition depot to the east of Aleppo, in northern Syria, located between the Al-Malikiayh and Al-Nayrab airport.

There have been unconfirmed reports of injuries and fatalities as a result of the reported strike. Sky News Arabia reported, citing rebel sources, that over 40 people might have been killed.

Videos posted online, allegedly from the scene of one of the strikes, show a massive explosion that lights up the skyline.

The explosions at the Hama depot lasted for over an hour and a half, spreading to the nearby area and forcing some of the residents to flee their homes, Sky News reported, citing sources.

Earlier this month, Israeli jets crossed into Lebanon's airspace to carry out an airstrike on Syria’s T-4 airbase near Homs, reportedly killing seven Iranian advisers. Two Israeli warplanes fired eight guided missiles, five of which were shot down by Syria’s air defenses, according to the Russian military. Iran’s Supreme Leader Ali Khamenei denounced the April 8 airstrike as “Israel’s crime,”vowing retaliation

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