Q Proof?
Shock and Awe?
Moves and Counter Moves?
According to one take, the shock-and-awe Saudi strategy could be an attempt to impose maximum pain in the quickest possible way to both Russia and other producers, most notably shale, in an effort to bring them back to the negotiating table…….
Aramco widened the discount for its flagship Arab Light crude to refiners in north-west Europe by a hefty $8 a barrel, offering it at $10.25 a barrel under the Brent benchmark. In contrast, Urals, the Russian flagship crude blend, trades at a discount of about $2 a barrel under Brent. Traders said the Saudi move was a direct attack at the ability of Russian companies to sell crude in Europe.
Confirming the obvious, Iman Nasseri, managing director for the Middle East at oil consultant FGE said "Saudi Arabia is now really going into a full price war."
The draconian cuts in monthly pricing by state prouder Saudi Aramco are the first and clearest indication of how the Saudis will respond to the break up of the alliance between OPEC and Russia, which as we noted earlier, dumped MbS on Friday in a stunning reversal within OPEC+. Talks in Vienna ended in dramatic failure on Friday as Saudi Arabia’s gamble to get Russia to agree to a prolonged and deeper cut failed to pay off.
And the second indication that the OPEC oil cartel is now effectively dead, came a few hours later when Bloomberg again reported that in addition to huge price cuts, Saudi Arabia was set to flood the market with a glut of oil to steal market share and capitalize on its just announced massive price cuts as the kingdom plans to increase oil output next month, going well above 10 million barrels a day.
In addition to slashing prices, Saudi Arabia has privately told some market participants it could raise production much higher if needed, even going to a record of 12 million barrels a day, according to Bloomberg sources.
But before hitting a stunning 12mmb/d, Saudi production will first rise above 10 million barrels a day in April, from about 9.7 millions a day this month: "That’s the oil market equivalent of a declaration of war," an unnamed commodities hedge fund manager said.
https://www.zerohedge.com/commodities/saudi-arabia-starts-all-out-oil-war-destroys-opec-flooding-market-slashing-oil-prices