Saudi Aramco, the world’s largest oil exporter, lowered the pricing terms for Arab Light crude sold to Asia by the most in 10 months, signaling Saudi Arabia has no plans to back down while OPEC rival Iran tries to regain market share amid a global oversupply, Bloomberg reported.State-owned Saudi Arabian Oil Co. said Sunday it will sell cargoes of Arab Light in September at $1.10 a barrel below Asia’s regional benchmark.
That is a pricing cut of $1.30 from August, the biggest drop since November, according to data compiled by Bloomberg. The company was expected to lower the pricing by $1 a barrel, according to the median estimate in a Bloomberg survey of eight refiners and traders.
Earlier, in July, Chief Executive Amin Nasser told Reuters that Saudi Aramco wasn't worried about rival producers, such as Iraq, Iran and Russia, gaining ground in key market Asia, destination for about two-thirds of the kingdom's exports.
"Customers are increasing, no we are not," he said.
To maintain market share, Iran’s oil production has increased since January 16, 2016 when implementation of the Joint Comprehensive Plan of Action (JCPOA) and lifting of sanctions began. Some 600,000 barrels per day (b/d) has been added so far and the government plans to raise it up to 800,000 b/d by the summer of 2016, reaching pre-sanction levels (prior to 2014).
Saudi Arabia, which is the largest OPEC oil producer and exporter, produced 10.308 million barrels per day of oil in June compared to 10.242 million barrels per day in May, according to OPEC’s latest estimates.