Petrol: European and American refiners refuse to buy Saudi crude
Many refiners in Europe and the United States are refusing to buy more Saudi crude offered at reduced prices, the Wall Street Journal reported yesterday.
The news may jeopardize the sustainability of a price war and a battle for market share launched by Riyadh, according to the WSJ, which reports that Saudi Arabia is struggling to find new buyers.
And about the reasons why refineries in Europe and America are refusing to buy more Saudi crude, the WSJ says buyers are finding it difficult to store the extra oil.
The Saudi oil company said earlier this month that it is cutting prices and plans to increase production by 2.5 million barrels a day next month. The move came after Russia refused to join a Saudi Arabian-led Organization of Petroleum Exporting Countries (OAS) reduction proposal.
The price of Brent North Sea is negotiated on Friday between 25 and 26 dollars per barrel. The price war launched by OPEC leader Saudi Arabia after cartel partner Russia refused to cut production by 1.5 million barrels caused prices to plummet black gold, jeopardizing the economies of producing countries, including the American producers of shale which are heavily indebted.
This strategy, already adopted by Saudi Arabia in 2014, which consists of flooding the world oil market by opening the floodgates, failed since oil prices never approached the levels they had reached before the crisis of June 2014.
As a reminder, OPEC has sharply lowered its forecast for growth in world demand for oil in 2020, due to the slowdown in global economic growth associated with the spread of the coronavirus epidemic outside China.
The cartel now expects global demand growth to 60,000 barrels / d, explaining that the impact of the Covid-19 epidemic in China and its negative effects on transport and industrial fuels were the main causes of this downward revision.
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