As the world's two major crude oil exporting countries, Saudi Arabia and Russia, increase their oil exports to Asia, a competition for market share in Asia is quietly unfolding. Asia, as the world's largest crude oil importing region, has become the focus of competition between the two countries. Although Saudi Arabia and Russia are allies within the OPEC+framework, they are fiercely competing in the Asian market by adjusting their export strategies and prices. This competition not only affects the global crude oil supply pattern, but may also exert downward pressure on oil prices.

Russia's export fluctuations and the impact of sanctions

In recent years, Russia has replaced Saudi Arabia as the largest oil supplier to major Asian countries, but in the first two months of this year, Russia's maritime exports to these countries have stagnated. According to Kpler data, the sea freight oil imported by major Asian countries from Russia in February dropped to 969000 barrels per day, the lowest level since December 2022. This decline is partly attributed to the new sanctions imposed on Russian shipping by former US President Biden before he stepped down. However, as the market gradually adapts to sanctions, Russia's exports to major Asian countries are expected to rebound to 973000 barrels per day in March, and India's imports from Russia may also increase to 1.92 million barrels per day.

Saudi Arabia's response strategy

Faced with competition from Russia, Saudi Arabia did not sit idly by. According to Kpler data, Saudi Arabia's oil exports to major Asian countries reached 1.64 million barrels per day in March, the highest level since August 2023. In addition, Saudi Aramco has lowered its official selling price (OSP) for oil in April to enhance its competitiveness. This measure is in line with OPEC+'s decision to slightly increase production by 138000 barrels per day starting from April. Although the scale of production increase is limited, Saudi Arabia has sent a clear signal of expanding market share by reducing OSP.

The impact on global oil prices

The competition between Saudi Arabia and Russia in the Asian market may increase the pressure on global crude oil supply, thereby having a downward impact on oil prices. The data on oil flow to Asia in March shows that the two countries are competing for market share by increasing exports and adjusting prices. The global benchmark Brent crude oil futures price has recently hovered around $69 per barrel, slightly higher than the four-year low of $68.33 set on March 5th. As the export competition between Saudi Arabia and Russia intensifies, oil prices may face further downward pressure.

summarize

The competition between Saudi Arabia and Russia in the Asian crude oil market is escalating, and although the two countries are allies within the OPEC+framework, they are each showing their own tricks in the competition for market share. Russia is gradually resuming exports by adapting to sanctions, while Saudi Arabia is consolidating its position by reducing OSP and increasing exports. This competition not only affects the supply pattern of the Asian market, but may also exert downward pressure on global oil prices. In the future, the export strategies of Saudi Arabia and Russia and their impact on the market will continue to be the focus of attention in the global energy market.