Russia blames missed oil target on rise in gas condensate output

Installation work at the Moscow oil refinery is shown in this photo taken in 2017. (Shutterstock image)
Updated 21 October 2019

Russia blames missed oil target on rise in gas condensate output

  • Output falls but remains above global production cap as minister vows country will work to fulfill its obligations
  • OPEC, Russia and other oil producers, an alliance known as OPEC+, agreed in December to reduce supply by 1.2 million bpd from the start of this year

MOSCOW: Russia produced more oil in September than envisaged by a global deal due to an increase in gas condensate output as the country prepared for winter, local news agencies reported on Sunday.

Russian oil output edged down to 11.25 million barrels per day (bpd) last month from August’s 11.29 million bpd, but remained above the cap set under the global production deal.

Under the accord reached between the Organization of the Petroleum Exporting Countries (OPEC) and allied producers, Russia has agreed to reduce output by 228,000 bpd from an October 2018 baseline.

Energy Minister Alexander Novak has said the reduction totaled 200,000 bpd last month. He reiterated that the country would strive to fulfil its obligations this month in full.

“We had specific obligations related, among other factors, to dealing with the winter period, with the production of gas condensate,” TASS news agency quoted Novak as saying.

Output of gas condensate, a light oil, is included in Russian statistics on total oil production.

OPEC, Russia and other oil producers, an alliance known as OPEC+, agreed in December to reduce supply by 1.2 million bpd from the start of this year.

OPEC and its allies will meet on Dec. 5-6 in Vienna to review output policy.

Market participants believe the group known as OPEC+ could decide to extend production cuts “and wait until world demand catches up with the supply situation,” Andy Lipow, president of Lipow Oil Associates in Houston said last week.

OPEC Secretary-General Mohammad Barkindo has said deeper output cuts are an option and that OPEC would do what it could with allied producers to sustain oil market stability beyond 2020.

OPEC, Russia and other producers have agreed to cut oil output by 1.2 million barrels per day until March 2020.


Saudi consumers give online retailer AliExpress boost in Middle East market

Updated 4 min 1 sec ago

Saudi consumers give online retailer AliExpress boost in Middle East market

  • AliExpress currently delivers to more than 200 countries and can be used in 18 languages
  • Around 60 percent of the consumers are below the age of 35, with 51 percent being female

DUBAI: Due to the increasing amount of purchases from the region, the Chinese e-commerce AliExpress has started offering several new services.
The growing demand came specifically from Saudi Arabia and the UAE, where the retailer started offering consolidation of orders for cheaper delivery and cash on delivery as a payment option.
These services were tailored to consumers from the region, as the company knew “cash on delivery is very popular in Saudi and UAE,” according to AliExpress’s Middle East head, Matt Zhang.
The retailer, which is under the Chinese Alibaba multinational conglomerate, is also trying to expand its provided local services.
“We have an overseas warehouse in Dubai. We are trying to open a warehouse in Saudi. We are in the process of all the legal and facility planning,” Zhang said.
Sellers will have the chance to use this facility, which is usually stocked with high-demand items, to decrease delivery times.
They also use the local delivery company Aramex in Saudi Arabia and the UAE to decrease the amount of time required for orders to reach consumers.
“Cainiao works with local partners” to enhance the buying experience, Zhang added. Cainiao is a technological company and the logistics arm of Alibaba group, providing the various businesses under the conglomerate with a variety of solutions locally and globally.
All of these additions follow AliExpress’s main strategy to expand in the region, which is to provide “a good selection, more competitive price and good service,” Zhang said.
The e-commerce company has been working with a marketing agency for the region as well, as they believe they need “more local insights,” he added.
For consumers in Saudi Arabia, their top three categories for shopping are consumer electronics, home and garden, and phones and accessories.
One of the reasons why consumers choose to buy such items from AliExpress is the value for money they get in exchange.
Buyers and sellers are now able to skip the tedious process of export and import through warehouses and distribution centers, which shortens the whole value chain and provides the same goods for a smaller amount of money.
Another interesting defining factor of consumer behavior in Saudi Arabia is the tendency to explore more options under each category compared to other countries.
The top three categories make up less than 40 percent of the ordered products, leaving the remaining more than 60 percent scattered over a long list of sub-categories.
On top of AliExpress, Alibaba is penetrating the regional market in other ways too.
If you have noticed the recent 11.11 sales and offers, they have been inspired by a decade-long shopping festival in China.
Although 11.11 is just starting to bloom in the region, it is a long-established event in China featuring a variety of entertainment and shopping events.
The famous US singer, Taylor Swift, performed at Shanghai’s Mercedes-Benz Arena during this year’s gala event for the shopping festival.
Several local retailers offered discounted items, ranging from baby care products, to groceries, to electronics and clothes.
At the end of the 24-hour shopping festival, Alibaba’s gross merchandise value (GMV) surpassed $38 billion, according to the company.
Alibaba reported that over 215 leading international brands, like Lancome and Shiseido, debuted one million new products, with over 240 11.11 themed items, during the 2019 festival.
The conglomerate is currently focusing on new retail in China, or as they have explained, an offline and online shopping experience. Tmall customers can view products online, and either buy them through delivery of find the nearest outlet to check the items in real life.
They are also undertaking new ventures in the country, such as the Flyzoo hotel in Hangzhou, which is fully automated and is operated by robots.
AliExpress currently delivers to more than 200 countries and can be used in 18 languages. Around 60 percent of the consumers are below the age of 35, with 51 percent being female.
Currently, the countries with the highest GMV are Russia, Spain, France, Poland and Brazil.
The retailer is also working on offering more international businesses to operate on their website and sell products. The service has already been launched in Russia and Turkey.