THE PRICE WAR AMONG OPEC MEM­BERS

Qatar Today - - BUSINESS > OIL & GAS -

Sup­pli­ers from the Or­ga­ni­za­tion of Petroleum Ex­port­ing Coun­tries have al­ways moved to­gether, rais­ing or low­er­ing prices in tan­dem. Now, Kuwait is un­der­cut­ting Saudi Ara­bia by the most on record and Iraq is also sell­ing its oil more cheaply than the group's big­gest mem­ber. Qatar is pric­ing car­goes at the big­gest dis­count in 27 months to com­pet­ing crude from Abu Dhabi.

While the group that ac­counts for about 40% of global oil sup­plies main­tains a col­lec­tive strat­egy of flood­ing the mar­ket with crude, the sem­blance of unity has van­ished when set­ting monthly sell­ing prices. With Asia forecast to ac­count for most of the growth in global oil de­mand this year, com­pe­ti­tion for the re­gion's buy­ers is trump­ing his­tor­i­cal al­le­giances.

Kuwait's of­fi­cial price for its Ex­port Blend crude to Asia was a record 65 cents cheaper than Saudi Ara­bia's sim­i­lar-qual­ity Arab Medium crude in Oc­to­ber and 60 cents for Novem­ber. The dif­fer­ence has widened from 40 cents at the be­gin­ning of 2014.

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