Saudis Under Pressure to Maintain Oil Market Share: Commerzbank

Saudi Arabia is increasingly becoming under pressure to maintain oil market share, amid rising US oil production as well as competition from Russia, Iran and Venezuela, Commerzbank analyst Carsten Fritsch said in a note.

• “Either further reduce production to support prices and lose market share to the competitors or, as in 2015, expand production and try to squeeze shale oil producers with higher production costs out of the market through lower prices,” Fritsch said.
• “Saudi Arabia is in strong competition with cheaper suppliers such as Russia and Iran, which offer their oil at a significant discount due to Western sanctions,” he said.
• Saudi Arabia cut all of its OSPs for February for all regions, with the price for Arab Light crude to Asia falling to the lowest level since November 2021, above market expectations.
• The deeper-than-expected cut “indicates a weakening of demand for oil in the three most important demand regions,” the note said.