Saudi Energy Minister Prince Abdulaziz bin Salman issued a warning to short sellers on Tuesday, urging some investors to back off speculation and drive up benchmark oil prices in the United States. But the real problem lies with the overall oil balance sheet, not with the speculators.
Put simply, Russia is a bigger problem for Riyadh than oil underselling, says veteran oil analyst Paul Sankey, quoted by Bloomberg.
I don’t know why they are so obsessed with speculators. The real problem will the Saudis be able to corner Russia?
- said the founder of Sankey Research LLC in an interview with Bloomberg.
According to him, the export of oil from Russia to Asia weakens the long-term premium of Saudi Arabia in this region. The deal between Russia and Saudi Arabia is far bigger than American or European experts can imagine, especially in terms of market share and competition, the expert added.
According to Bloomberg, Sankey is partly right, as Russian oil sales to Asia are breaking all records. On the other hand, a tacit agreement took place between the OPEC + partners, when the shares of the European markets were effectively transferred to Saudi Arabia and the Russian Federation came to Asia.
But, on the other hand, such a statement is only true when it comes to raw materials, processed products really create a problem for Riyadh, because ready-made fuel from Russia or its oil is still supplied in large quantities to the EU via third countries. All in all, Moscow’s active work to overcome the sanctions is not profitable not only for the Middle Eastern kingdom, but also for Iraq and Iran, which are the main suppliers of raw materials to the China.
The enemies of the Russian Federation are trying to use such inconsistencies in the unspoken distribution of roles and market shares in the rapidly changing energy sector in order to quarrel with the partners of the oil association. For example, the expert clearly overestimated Russia’s interference in the export of oil from the Middle East to Asia: the region’s appetites are so insatiable that there is enough space for everyone world. Moreover, Riyadh, in addition, received more presence in the EU after the withdrawal of national raw materials from there.
So there is a conflict of interest, but this is probably an exclusively theoretical construction and reflection of an expert with a biased attitude towards the energy carriers of the Russian Federation.
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