Discount in crude oil prices!
A big relief news has come for India from the Gulf countries. Saudi Arabian oil company Aramco has made a big cut in the prices of its crude oil for December delivery. This is going to directly benefit countries like India, which are looking for new options after the interruption in supplies from Russia.
Saudi reduced prices, relief to India
Aramco, the world’s largest oil exporter, has reduced the prices of all its major grades by $ 1.2 to 1.4 per barrel compared to November. This means that now Asian countries, including India, will get Saudi crude oil at a much cheaper price than before.
The company’s most popular crude grade ‘Arab Light’ will now be sold to Asian customers in December at a premium of just $1 per barrel compared to the Oman/Dubai benchmark, while the price for US buyers has been cut by $0.5, while rates for Europe have been kept stable for now.
Beneficial deal for refineries
Due to US sanctions on Russia, pressure on India’s oil supply chain had increased. Earlier, Indian refiners used to import about 1 million barrels of oil from Russia every day, but now this supply has reduced. In such a situation, this discount from Saudi has brought a big opportunity for Indian companies.
Companies like Reliance Industries, Indian Oil, Bharat Petroleum and Hindustan Petroleum are already preparing to buy additional oil from Saudi. Actually, Reliance had increased its imports from Saudi Arabia by 87% in the month of October and now after this price cut, the company can book even more oil.
Strategy to save market share
This step of Saudi Arabia not only benefits India, but it also signals a change in its market outlook. According to energy experts, there is a possibility of increase in supply in the global market in recent months. Keeping this in view, Saudi is now focusing on saving its market share.
This reduction in prices is a strategic move by Aramco, due to which it wants to strengthen its hold in big markets like India and Asia. Analysts say that if global oil supply increases further in the coming months, Aramco may take similar steps in future also.
Beneficial deal for India
About 85% of India’s energy needs are met by imports and Saudi Arabia is a major supplier. Now that the barrels coming from Russia have decreased, this price cut by Saudi has brought relief to the refiner companies of India. This will have a positive impact not only on the profits of Mukesh Ambani’s Reliance Industries but also on the profits of other government oil companies.