Saudi Arabia, one of the biggest oil exporters in the world, if not the current biggest, is planning to escalate oil price.
Saudi believes that they can hit two birds with one stone. Accordingly, this means that they want to boost export to China and cut shipments to the US. Some believe that this is so following the US-China trade war.
In addition, the country has been planning to reduce oil exports to the most interested market, the US. In the meantime, Saudi Arabia is constructing a long-term goal to boost oil export to China.
Additionally, China is world’s current biggest oil importer. This is understandable since China is also planning to boost import on other oil products. Recently, the country has made a decision to greatly import palm oil products from Indonesia and Malaysia following the palm oil war with the European Union.
Also Read: Facebook Takedown Influence Campaign Linked to Saudi Government
The Organization of the Petroleum Exporting Countries (OPEC) indicates that the market will be in slight surplus in 2020.
Actually, Saudi’s oil field has just recently been attacked by Yemeni separatist, the Houthi rebels, due to the Yemen War or Gulf War.
Attack on Saudi’s Oil Field
As reported by Al Jazeera, Saudi’s oil field has become one of the firing lines of the Gulf War. This is so due to Saudi’s participation in the war.
Drones attack the oil field, yet Saudis did not think that it did much harm. The country believes that the attack does not affect the oil production and trades.
Giovanni Staunovo, one of the oil analysts from UBS, also thinks the same. Instead, the attack somehow gave the possibility to raise oil’s price.
“The oil market seems to be pricing in again a geopolitical risk premium following the weekend drone attacks on Saudi Arabia, but the premium might not sustain if it does not result in any supply disruptions,” he said.
Also Read: Oil Trading Strategies and Tips