“The Saudi numbers to Asia were quite outside of the expectations,” Johannes Benigni, chairman of JBC Energy GmbH, said at an oil industry conference in Dubai on Dec. 9. Middle Eastern suppliers to Asia are facing more competition from producers that used to sell oil into the U.S. or Europe, while buyers are seeking new, less expensive supplies, he said.
Persian Gulf oil producers sell most of their crude under long-term contracts to refiners. Most of the region’s state oil companies price their oil for sale in future months at a premium or discount to a benchmark.
Kuwait has sold its crude to Asia at a discount to Saudi Arabia since at least June 2000, according to data compiled by Bloomberg. Kuwait ranks third for output, along with the United Arab Emirates, among the 12 OPEC members, the data show.