Saudi Arabia-based state-owned oil behemoth Aramco has slashed its selling price in Asia despite agreeing to a historic deal to cut production and end the oil price war, the media reported.
Aramco slashed its selling price for its buyers in Asia by $4.20 per barrel. Interestingly, Aramco raised its selling price for its buyers in the US and Europe.
The decision highlights Aramco’s ambition to continue dominating the market in Asia, where it sells most of its oil.
After an intervention by the US President Donald Trump, both Saudi Arabia led OPEC and Russia agreed to end the oil price war by agreeing to cut production by 9.7 million barrels per day over May and June, with staggered cuts in the months to follow. Saudi Arabia and Russia also agreed to cut production by 8.5 million barrels a day, each.
The production cut announced by the OPEC, which is formed by 23 members, is the single largest output cut in history. This amount will taper to 7.7 million barrels per day or the remaining six months of the year and to 5.8 million barrels per day for 16 months after that.
US President called for a meeting with OPEC and other oil producers in the world as depleting oil prices were severely hurting the US shale market.
Last month, a negotiation between OPEC and Russia collapsed with regard to cutting production in light of the coronavirus pandemic. Since then, global oil prices collapsed as much as 30 percent, highest in the last two decades.
Since then, producers such as Aramco and Adnoc flooded the market with greater output.