FX.co ★ Saudi Arabia ruling oil market supreme

Energy investors and oil analysts are unnerved by Saudi Arabia’s tough stance. Riyadh’s aggressive marketing strategy defeated Russia in the oil price war which was unleashed by the Kremlin in March. Now de factor OPEC leader Saudi Arabia has been reigning supreme in the global oil market. One of its cunning ploys is delaying the release of its export prices. The state-owned Saudi Aramco has been practicing this trick for the third straight month, thus keeping the market in suspense. Each time, the close-watched price list caught competitors off-guard as Saudi Aramco offered jaw-dropping discounts. However, the latest update of its international crude prices came as a surprise because the oil company eventually raised export prices for all its markets, comprising Asia, Europe, and the US. The predatory price policy has become the key weapon in the oil price war which has proven itself as extremely powerful. Saudi Arabia seems to have grasped principles of the complicated pricing mechanism in the global oil market. In Russia, all the authorities can do is just inflate prices of petrol or electricity. Interestingly, such directives from the Kremlin never raise a storm of protest among the population. People hardly dare to express their discontent in the streets. The global market operates under completely different rules. No consumer in the world would ever buy crude oil at exorbitant prices because of its special attitude to the supplier. When it comes to oil prices, they do not obey any one’s directives.