BAKU, Azerbaijan, March 8. Competition among three largest oil producers, namely, the US, Saudi Arabia and Russia will intensity in Asia, Trend reports with reference to the Oxford Institute for Energy Studies.
"Russia continues to redirect its crude to Asia, its share of China’s and India’s crude imports has been increasing. For instance, in the case of India, Russia’s share increased from 1 percent in 2021 to 15 percent in 2022 while that of Saudi Arabia increased y/y marginally by 1 percent to 17 percent. In contrast, the share of the US in India’s imports has declined to 7 percent in 2022 from 10 percent in 2021. The impact of Russia’s redirecting its crude in Asia has been felt most strongly on those exporters that rely on spot market such as the US, West African and South American producers and less on sellers with term contracts such as Saudi Arabia," reads the OIES report.
The report reveals that from Asian countries’ perspective, access to discounted Russian crude is one factor among many that enter their purchasing decision, including securing supplies from more reliable sources, buying on the basis of term contracts, diversifying sources of supply, having access to suitable types of crude.
"Access to discounted Russian crude and lower Russian exports of products to Europe allowed the Asian refineries to increase their share of the EU products imports markets. For instance, exports of products from India to Europe have increased y/y by 33 percent in 2022 and more than doubled in Q4 compared to a year earlier (up by 55 percent y/y). From producers’ perspective, Asia is a key growth market and keeping a strong foothold in this market is an essential element of their strategy. With Russia redirecting its exports to Asia, the competition will only intensify and the pricing, marketing, storage, and investment strategies of Gulf players including Saudi Arabia will have to adjust to more competitive markets in Asia," OIES analysts say.