October 13, 2015 / 10:15 AM / 4 years ago

UPDATE 2-Saudi starts oil supplies to Poland, in set-back for Russia

* Russia’s Sechin says Saudis are “actively dumping”

* Moscow needs to act to preserve market share - Sechin

* Poland received at least 3 Saudi cargos - trade (Adds details, quotes, details)

By Gleb Gorodyankin, Denis Pinchuk and Katya Golubkova

MOSCOW, Oct 13 (Reuters) - Saudi Arabia has started supplying crude oil to Poland, the head of Russia’s biggest oil company Rosneft said on Tuesday, becoming another Middle Eastern producer to enter a market traditionally dominated by Russia.

A global battle is underway among oil exporters for market share, with producers with the deepest pockets, such as Saudi Arabia, using low prices to enter new markets, often at the expense of Russia.

If Russia appears to be losing that battle for market share, it could have an impact on decisions made about crude production at a meeting of oil exporters’ club OPEC in December.

“We are working under conditions of tough competition,” Rosneft Chief Executive Igor Sechin told an investor conference in Moscow.

“Saudi Arabia has entered the Polish market for the first time, with deliveries via Gdansk,” he said, referring to the port on the Baltic Sea.

“They are actively dumping, which is an element of the changes in world prices. Without doubt, the battle for markets is at this stage one of the key factors.”

“We have to make every effort to prevent a decrease in our share of supplies,” Sechin said.


Sechin gave no details on the volumes of Saudi crude sent to Poland, another indication of the shifting balance in the global market after Hungary has increased oil imports from Iraq’s Kurdistan region, displacing Russian crude.

A trading source said the first cargo reached Gdansk on Sept. 21, with the Saudis offering prices lower than Russian Urals. “Poland has got at least three cargos. The discount (to Brent) is just fantastic (compared to Urals),” the source added.

Global oil prices have more than halved since June last year. Saudi Arabia, the top exporter and the leading OPEC member, has refused to cut production, as has Russia, the world’s second biggest exporter but not a member of OPEC.

Markets are also awaiting the return of Iranian oil after a deal on Iran’s nuclear programme was reached earlier this year. Iranian Oil Minister Bijan Zanganeh has said Iran expects to raise oil output by 500,000 bpd as soon as sanctions are lifted and by a million bpd within months.

The trader said he believed Saudi Arabia was targeting new markets ahead of a rise in competition after Iran starts additional supplies.

“They want to secure share on the market, in particular in Poland, before Iran returns,” he said.

By sticking to its policy of not cutting production, OPEC expects higher-cost oil producers ultimately to reduce output and to help the market rebalance.

A weaker rouble has helped to offset losses to Russian companies caused by low oil prices. The government has decided to raise energy taxes next year to reduce the budget deficit - a move oil firms said would harm output.

Sechin said on Tuesday he saw risks of Russia’s overall annual oil output falling by between 25 million and 30 million tonnes in the next three years due to tax changes for the industry, if they are to be continued. (Writing by Christian Lowe/Katya Golubkova, editing by Louise Heavens and David Evans)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below