Gulf Oil Producers Ramp Up Price War as China, Supply Concerns Persist
The Persian Gulf’s biggest oil producers appear to be intensifying their price war in a competition to maintain their share of the Asian market amid uncertainty about the direction of the oil market in 2015.
Saudi Arabia, Iran and Iraq all cut their official prices for October deliveries to Asia this month, amid new concerns about the economy in China—one of their biggest customers—and a persistent glut that isn’t likely to disappear even as U.S. output begins to fall.
The slashed prices—down 30 cents in Saudi Arabia, 35 cents in Iran and 50 cents in Iraq, for light crude—are similar to the measures taken earlier in 2015, when global prices for crude fell below $50 a barrel from highs of $114 the previous summer.
Saudi Arabia, Iran and Iraq all cut their official prices for October deliveries to Asia this month, amid new concerns about the economy in China—one of their biggest customers—and a persistent glut that isn’t likely to disappear even as U.S. output begins to fall.
The slashed prices—down 30 cents in Saudi Arabia, 35 cents in Iran and 50 cents in Iraq, for light crude—are similar to the measures taken earlier in 2015, when global prices for crude fell below $50 a barrel from highs of $114 the previous summer.
Instead of cutting production as it did in past times of market turmoil, the Organization of the Petroleum Exporting Countries decided to keep on pumping, and its members began an all-out price war to keep market share. (by BENOÎT FAUCON and SUMMER SAID, Wall Street Journal)