When Saudi Arabia’s oil minister Ali al-Naimi says he does not want the kingdom to lose market share anymore, he really means it.
Iraq, Venezuela, Russia and Kazakhstan all saw their oil partially replaced by Saudi crude in Asia, the United States and even Europe, with its lackluster demand, as traders said the kingdom offered customers more oil, and more cheaply.
Supplies from OPEC’s leading producer are notoriously difficult to track as they reach customers under confidential direct deals rather than via the spot market. But an indirect confirmation of rising deliveries came on Sunday from Naimi himself.
The veteran minister, who carefully chooses his words and figures in his speeches, said the kingdom was now pumping around 10 million barrels per day – near an all-time high and some 350,000 bpd above the figure Saudi Arabia gave to OPEC for its February output.
And to stress the message, Naimi said the kingdom had the ability to increase if customers asked for more.
Gary Ross, the founder and executive chairman of PIRA, the first consultancy to predict Saudi oil output rising to 10 million bpd in March, said PIRA’s research and conversations with customers showed additional crude would be delivered to Asia and the United States.
In Asia, some Chinese refineries switched from using West African barrels to the Saudi Arab Light grade. In the United States, some customers increased their use of Saudi oil because of very competitive pricing.
About Alfonso Esparza
Senior Currency Strategist, OANDA, Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, he established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto. Follow on Twitterand on his Google+ profile.