Saudi Arabia not considering non-dollar oil trade: official

A view of Saudi Aramco's Shaybah oilfield at the Empty Quarter in Saudi Arabia. (Reuters)
Updated 08 April 2019
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Saudi Arabia not considering non-dollar oil trade: official

DUBAI: The Saudi Arabian Energy Ministry has rejected the suggestion that it is considering selling oil in currencies other than the traditional US dollar.
In its first public reaction since speculation began last week that the Kingdom might consider pricing oil in other currencies if the Americans enacted legislation aimed at OPEC, the ministry said: “Recent reports claiming that Saudi Arabia is threatening to sell its oil in currencies other than the dollar are inaccurate and do not reflect Saudi Arabia’s position on the matter.
“The Kingdom has been trading its oil in dollars for decades and that has served well its financing and monetary needs. Furthermore, the Kingdom remains committed to be a stabilizing force to energy markets and does not want its key priority to be out at risk, including changes to the financial terms of oil trading relationships around the world.”
The reaction from the ministry - headed by energy minister Khalid Al-Falih who is also the chairman of the world’s biggest oil company Saudi Aramco - will put and end to speculation that the Kingdom intends to react radically to the possible passage of what has been called “NOPEC” laws in the US.
Such a law is opposed by US energy leaders and by the Energy Secretary Rick Perry as potentially destabilizing for world energy markets. A final decision on the law - if it gets passed by the US Congress - would be the responsibility of the administration of Donald Trump, who has not so far indicated his thinking on the matter.


Oil dips on soaring US supply, but Iran sanctions still support crude

Updated 15 min 26 sec ago
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Oil dips on soaring US supply, but Iran sanctions still support crude

  • US sanctions against Iran have denied its government more than $10 billion in oil revenue so far
  • US crude oil production has risen to a record of 12.2 million barrels per day

SINGAPORE: Oil prices dipped on Thursday as record US output and rising crude stockpiles dampened the impact on markets of tighter US sanctions on Iran and producer club OPEC’s continued curbs on supply.
Brent crude futures were at $74.53 per barrel at 0241 GMT, down 4 cents from their last close.
US West Texas Intermediate (WTI) crude futures were at $65.75 per barrel, down 14 cents, or 0.2 percent, from their previous settlement.
Crude futures rose to 2019 highs earlier in the week after the United States said on Monday it would end all exemptions for sanctions against Iran, demanding countries halt oil imports from Tehran from May or face punitive action from Washington.
“Following the US decision to toughen its sanctions on Iran ... we have revised up our end-year forecast for Brent crude from $50 to $60 per barrel,” analysts at Capital Economics said in a note.
US sanctions against Iran have denied its government more than $10 billion in oil revenue since President Donald Trump first announced the move last May, a US official said on Thursday during a media call.
“Before sanctions ... Iran generated as much as $50 billion annually in oil revenue. We estimate that our sanctions have already denied the regime more than $10 billion since May (2018),” said Brian Hook, US Special Representative for Iran and Senior Policy Adviser to the Secretary of State.
The US decision try and bring down Iran oil exports to zero comes amid supply cuts led by producer Organization of the Petroleum Exporting Countries since the start of the year aimed at propping up prices.
As a result, Brent crude oil prices have risen by almost 40 percent since January.
Despite this, Capital Economics said “we still expect oil prices to fall this year as sluggish global growth weighs on oil demand, US shale output grows strongly and investor aversion to risk assets like commodities increases.”
In Asia, South Korea’s economy unexpectedly shrank in the first quarter, the Bank of Korea said on Thursday, marking its worst performance since the global financial crisis.
On the supply side, US crude oil production has risen by more than 2 million barrels per day (bpd) since early 2018 to a record of 12.2 million bpd currently, making the United States the world’s biggest oil producer ahead of Russia and Saudi Arabia.
In part because of soaring domestic production, US commercial crude oil inventories last week hit an October 2017 high of 460.63 million barrels, the Energy Information Administration said on Wednesday. That was a rise of 1.3 million barrels.