Saudi Arabia has managed to reclaim a portion of its oil market share in Asia, the largest oil-importing region globally, as its crude exports increased in November. Meanwhile, Russia’s crude shipments to the same region decreased, primarily due to reduced purchases by its two main buyers, China and India.

Data from LSEG Oil Research shows that Saudi Arabia’s crude oil exports to Asia surged by 550,000 barrels per day (bpd) in November, reaching 5.83 million bpd, compared to 5.28 million bpd in October. Conversely, Russia’s oil exports to Asia fell by 450,000 bpd, dropping to 3.51 million bpd in November from 3.96 million bpd in the previous month.

The drop in Russian crude sales to Asia was particularly evident in China and India, its two largest markets, both of which imported less Russian oil in November. At the same time, their intake of Saudi crude increased, according to the data.

Several factors likely contributed to Saudi Arabia’s growing exports. A narrowing price premium of Dubai’s oil benchmark over Russia’s Urals grade made Saudi oil more attractive. Additionally, the cost of transporting crude from Russia’s western ports to India rose, giving Saudi oil an edge in terms of logistics and pricing.

Interestingly, Saudi Arabia’s export boost came despite an increase in its official selling prices for November deliveries. Early in October, the kingdom raised the price of its Arab Light crude for Asian buyers by $0.90 per barrel, setting it at a $2.20 premium over the Dubai/Oman benchmark. This benchmark is used by Middle Eastern producers to price oil shipments to Asia.

Despite the price hike, Middle Eastern crude—Saudi grades included—remained more competitive in the Asian market compared to oil priced against the Brent benchmark, such as Russia’s Urals and crude from West Africa.

Saudi Arabia’s ability to increase exports even with higher official prices underscores its strategic positioning and adaptability in the competitive Asian oil market. Meanwhile, rising shipping costs and declining price advantages for Russian crude have curtailed Moscow’s presence in the region.

BY WPB

Oil, Crude, Market