Page 13 - FSUOGM Week 23 2022

FSUOGM POLICY FSUOGM

Saudi Arabia ready to ramp oil supply

to offset Russian losses: press

SAUDI ARABIA SAUDI Arabia has indicated to its Western allies prices,” one person briefed on Saudi Arabia’s
it is preparing to ramp up oil supply in the event thinking told the FT.
There are signs of of a substantial drop in Russian flow as a result The kingdom believes that while the oil mar-
a rapprochement of sanctions, the Financial Times reported on ket is tight and this has led to high prices, there
between Saudi Arabia June 2. are no genuine shortages, sources told the news-
and the US. The EU is set to reduce imports of Russian oil paper. But this could change as the post-coro-
and oil product supplies by around 90% by the navirus (COVID-19) economic recovery picks
end of the year under an embargo that has been up pace, particularly as major cities in China
adopted in its sixth set of sanctions. And the bloc reopen.
has also agreed with the UK to bar the insurance Relations between Saudi Arabia and the US
of ships that carry Russian oil within six months. have been tense recently, over the kingdom’s war
Western countries have put pressure on Saudi in Yemen and human rights abuses. But several
Arabia in recent months to ramp up supply to visits in recent weeks by a high-level US delega-
replace Russian oil and reduce prices, but so far tion, including White House co-ordinator for
the kingdom has resisted such calls. In their latest Middle East policy Brett McGurk and White
monthly meeting, however, Saudi Arabia and its House Energy Envoy Amos Hochstein have
OPEC+ allies agreed to boost output by 648,000 sought to achieve a rapprochement.
barrels per day (bpd) in July and by a similar These efforts have borne some fruit, with
amount in August, signalling that they are will- Saudi Arabia agreeing to shift its tone in order
ing to capitalise on Russia’s loss of market share. to calm prices, and offer reassurances that it will
“Saudi Arabia is aware of the risks and that ramp up oil supply if the supply crunch gets too
it is not in their interests to lose control of oil severe. ™

India eyes more discounted

Russian crude

INDIA INDIA is seeking to further expand imports of are set to drop faster over the coming months as
Russian oil, taking advantage of the heavy dis- the EU introduces its phased embargo of Russian
India is also interested count of the supplies, Bloomberg reported on crude. This has caused Russia’s flagship Urals
in expanding its June 6. oil blend to sink to a record discount to Brent
upstream footprint in State oil refiners in the country are collectively – something that India and some other Asian
Russia. working on finalising six-month supply deals buyers are eager to exploit.
for Russian oil, sources told the news agency. Meanwhile, Indian state oil companies have
The cargoes are being sought from Rosneft on also expressed interest in expanding their pres-
a delivered basis, with the seller due to handle ence in the Russian upstream sector, potentially
shipping and insurance. replacing the Western oil majors that are look-
These extra purchases, if concluded, would ing to exit the country. ONGC was reported
be on top of the shipments that India already last month to be considering placing more bids
receives from Russia under other contracts, for oil and gas assets in Russia, despite the fact
Bloomberg said. While details on volumes and that an earlier offer to buy Shell’s 50% stake in
pricing are still being negotiated, Indian banks the Salym fields in Western Siberia was rejected.
are expected to finance all the cargoes. The other assets it is considering include Exx-
The state refiners in question include Indian onMobil’s 30% stake in the Sakhalin-1 project,
Oil Corp, Hindustan Petroleum and Bharat and Shell’s 27.5% interest in the Sakhalin-2
Petroleum, while private refiners Reliance development.
Industries and Nayara Energy, part-owned by Along with ONGC, Bharat Petroleum, Indian
Rosneft, are also involved in the talks. Oil Corp. and Oil India Ltd are also understood
Western oil buyers have been shunning Rus- to have held preliminary discussions among
sian oil in the wake of Moscow’s invasion of themselves on whether to consider buying BP's
Ukraine, and the country’s supplies to Europe 20% stake in Russia’s Rosneft. ™

Week 23 08•June•2022 www. NEWSBASE .com P13