Saudi Arabia Oil Monopoly: Could Russia And Iran End It?

By Marie Cabural

Russia’s strategy in the Middle East and Iran‘s re-entry in the oil market could end Saudi Arabia’s monopoly in Asia, according to suggestions of some experts in the oil industry.

Image Source: Wikimedia Commons

Saudi Arabia dominates the oil market in Asia. Data from the U.S. Energy Information Administration (EIA) showed that the Kingdom maintained its market share among Asian oil importers during the first half of 2015.

According to the EIA, Saudi Arabia exported crude oil at an average of 4.4 million barrels per day (b/d) to its seven major trading partners in Asia from January to June this year. Asia represents more than 50% of the total crude exports of the Kingdom during the period.

The average total crude oil imports reported for seven Asian countries including China, India, Japan, South Korea, Singapore, Taiwan, and Thailand was 19.1million b/d. Saudi Arabia’s share of crude oil imports to the seven Asian countries was 23.2%

Russia surpasses Saudi Arabia as major supplier for China

Russia became a major crude supplier to China, the world’s second-largest oil consumers. In May, Russia supplied 3.92 million metric tons of oil to China, surpassing Saudi Arabia, which sold 3.05 million metric tons of oil.

Gao Jian, an analyst at SCI International previously commented that “Russia is using its good relationship with China to increase its supplies. Meanwhile, Saudi Arabia is losing its crown” because its selling prices in Asia haven’t been attractive enough. ”

The analysts added China’s oil import from Russia is expected to increase further since it can now use its renminbi as payment. According to him, Saudi Arabia needs to follow Russia’s decision to accept renminbi, not just dollar as payment for oil if it wants to regain its dominant position.