Fresh challenge faces Nigeria’s share of the Asian market with the ongoing price war among the big Arab oil producers.
Oil industry experts had advised the Federal Government to form alliances with the Asian customers to cushion the effects created by abandonment of the country’s oil by America.
Arab producers, who have always been on constant price war last week even pushed the notch higher because of the sliding crude oil prices, by offering discounts as high as above $4 per barrel, the highest in over a decade in order to retain their respective market shares.
Bloomberg recently reported that Iraq, Kuwait and Iran have joined Saudi Arabia in cutting their March crude prices for Asia, signaling the battle for a share of OPEC’s largest market is intensifying.
According to the report, “Iraq’s Basrah Light crude will sell at $4.10 a barrel below Middle East benchmarks, the deepest discount since at least August 2003, the Oil Marketing Co. said.
National Iranian Oil Co. said its official selling price for March Light crude sales will be a discount of $2.10 a barrel, the widest since at least March 2000, according to a company official who asked not to be identified because of corporate policy.
Kuwait Petroleum Corporation has also announced its discount will be $4.10, the biggest since August 2008.
“The cuts come after Saudi Arabia, the largest crude exporter, reduced pricing to Asia to the lowest in at least 14 years.
The Organisation of the Petroleum Exporting Countries, OPEC, left its members’ output targets unchanged at a November meeting, choosing to compete for market share against U.S. shale producers rather than support prices. Iraq is the second-biggest producer in OPEC, Kuwait is third and Iran fourth.”
The report further added: “Middle Eastern producers are increasingly competing with cargoes from Latin America, Africa and Russia for buyers in Asia. Oil prices have dropped about 45 percent in the past six months as production from the U.S. and OPEC surged.”
By Yemisi Izuora