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Saudi Arabia, Which Allegedly Hiked Output, Just Raised Crude Export Prices To Asia And Europe

Tyler Durden's picture


Two weeks ago Zero Hedge claimed that Saudi Arabian "gestures" to hike crude output were about as hollow as the heads of those suggesting that dealing with surging oil prices involves reducing interest rates even more (which just happen to be at zero already), mostly as a result of the country's recent adoption of "whorism" or its doomed strategy to buy the love of its citizens. The reason is that as UBS' Andy Lees noted, Saudi "will need to ramp up production by about 10% (more capital spending) without prices falling" to fill the suddenly gaping budget hole left from literally throwing $37 billion out of Bernanke's leased helicopter. Yesterday, BusinessWeek's Peter Coy essentially reaffirmed our theory verbatim in the piece "Saudi Arabia Must Keep Pumping Oil to Buy Stability"... needless to say we completely agree with this. Obviously, the bigger issue here is that as WikiLeaks recently suggested, and was reconfirmed by Jim Rogers, Saudi Arabia is simply lying about its excess capacity. Because if Saudi had indeed raised output as many have hoped for, and as Saudi has represented, it would have made up for the funding differential simply by the hike in export volume. Instead, as Reuters reports, Saudi Aramco just hiked prices on oil to customers in Asia and Europe up substantially. This, at least to us, does not appear like the rational action of a player seeking to moderate surging oil prices to avoid further social conflict, and one who can plug offline capacity.

From Reuters:

Top oil exporter Saudi Arabia has raised the price of its flagship Arab Light crude oil in April to customers in Asia, State oil giant Saudi Aramco said on Saturday.

Aramco set the price at Oman/Dubai plus $1.95 a barrel, up 65 cents from March.

The price to the United States was reduced by 30 cents to parity with Argus Sour Crude Index and the price to northwest Europe was raised by 80 cents to BWAVE minus $3.40.

Saudi term crude supplies to the United States are priced as a differential to the Argus Sour Crude Index (ASCI).

Good thing Saudi reduced its export price to the US. Too bad Canada, which exports far more to the US than Saudi did not follow suit.

And more on the April changes in carious price schedules:

April March Change

Arab Extra Light +2.60 +2.70 -0.10

Arab Light 0.00 +0.30 -0.30

Arab Medium -2.20 -1.85 -0.35

Arab Heavy -3.90 -3.65 -0.25

Prices at Ras Tanura for Saudi oil destined for Northwest Europe are set against ICE Brent crude weighted average (BWAVE):

April March Change

Arab Extra Light -1.10 -1.75 +0.65

Arab Light -3.40 -4.20 +0.80

Arab Medium -5.90 -6.10 +0.20

Arab Heavy -8.45 -8.55 +0.10

Saudi term crude supplies to Asia are priced as a differential to the Oman/Dubai average:

April March Change

Arab Super Light +6.05 +5.80 +0.25

Arab Extra Light +3.95 +3.30 +0.65

Arab Light +1.95 +1.30 +0.65

Arab Medium -0.45 -1.10 +0.65

Arab Heavy -2.55 -3.05 +0.50

Prices at Ras Tanura for Saudi oil destined for the Mediterranean are set against the ICE Brent crude weighted average (BWAVE):

April March Change

Arab Extra light -1.60 -3.15 +1.55

Arab Light -3.75 -4.75 +1.00

Arab Medium -7.70 -7.30 -0.40

Arab Heavy -10.05 -9.70 -0.35

And to see how a cartel deals with supply demand imbalances, Bloomberg summarizes:

Aramco this week offered European refiners additional cargoes of Arab Light crude for loading this month, two officials involved in the negotiations said. The official prices for light grades to Northwest Europe and the Mediterranean Sea gained as oil prices rose and as lighter Libyan crudes were taken out of the market.

One can only hope, and the ruling oligarchy surely is, that the combination of increasing output and prices will be able to offset next week's planned demonstrations in Saudi. Look for many more billions to be thrown at Saudi's discontents over the next week as D-day approaches. And on, and on...


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Sat, 03/05/2011 - 22:13 | Link to Comment trav7777
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ain't hap'nin...bitchez

Sat, 03/05/2011 - 23:54 | Link to Comment asdasmos
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Greenspan on Gold's Rise - CNBC 4/3/11

Sun, 03/06/2011 - 11:28 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Who cares what that mean old bastard says anymore, he is just a lying and smirking son of a female dog.

Sun, 03/06/2011 - 03:51 | Link to Comment Yen Cross
Yen Cross's picture

I need that bullet hole my friend! the bloody red one!

Sun, 03/06/2011 - 07:16 | Link to Comment Broken_Trades
Broken_Trades's picture

Cooking the oil out of dirt aint cheap.


Price in BC right now  $1.23/L ~~ $4.64 (CAD/Gallon) = 4.79 USD/Gallon

Even in Alberta, Gas is selling for well north of 4$/G




Sun, 03/06/2011 - 12:25 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture


broken_trades:  define "gallon".


if you can take a punch, here's some better news, friend (from Utah House stamps gold, silver as legal tender | The Salt Lake Tribune


Sat, 03/05/2011 - 22:30 | Link to Comment sushi
sushi's picture

Of course rising crude prices will feed forward into agricultural commoditites and since sand is exactly like gold and you cannot eat it, therefore Saudi food imports will suffer price increases resulting in social discontent and unrest, which will be followed by throwing money at the people and jacking the price of crude to pay for it and . . .and . . .

I am sure there is a positive outcome in here somewhere.

Sat, 03/05/2011 - 22:41 | Link to Comment spinone
spinone's picture

Makes sense they wouldn't want to hike oil prices to net food exporters like the US and Canada.

Sat, 03/05/2011 - 22:43 | Link to Comment dark pools of soros
dark pools of soros's picture

more live camel cavalry charges??

Sun, 03/06/2011 - 11:30 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

The Mossad copies.

Sun, 03/06/2011 - 12:20 | Link to Comment BobPaulson
BobPaulson's picture

Qu'ils mangent de la brioche...

Sat, 03/05/2011 - 22:45 | Link to Comment dick cheneys ghost
dick cheneys ghost's picture

oil price aint seen nothing yet.

Sat, 03/05/2011 - 23:18 | Link to Comment DaveyJones
DaveyJones's picture

they lie about stuff going out, we lie about folks going in

Sat, 03/05/2011 - 23:20 | Link to Comment SgtShaftoe
Sat, 03/05/2011 - 23:19 | Link to Comment Caviar Emptor
Caviar Emptor's picture
Abdullah Shrugged. World perspires. 
Sat, 03/05/2011 - 23:23 | Link to Comment max2205
max2205's picture

Life is going to get interesting with $350 oil

Sun, 03/06/2011 - 01:22 | Link to Comment Hdawg
Hdawg's picture

Will not get there.

We'll have an Egyptian style bank holiday and when it re-opens in wont be priced in USD and then within a year nothing will be.

Sat, 03/05/2011 - 23:30 | Link to Comment Canucklehead
Sun, 03/06/2011 - 02:01 | Link to Comment RoRoTrader
RoRoTrader's picture

nothing like selling hate and fear propped with ignorance, so got any referrences to where the IRA fits into all of that weird shit.

did i forget to mention stupidity that Muslims, Christians and other religions share in common along with 2 eyes, 2 hands and feet, a family, m/f, b/s .......and the same basic needs to have a decent life..

Sun, 03/06/2011 - 08:43 | Link to Comment Canucklehead
Canucklehead's picture

Relax, RoRoTrader.  I'm not sure if your comment is a parody of the linked article or if you want to discuss the IRA's role in Saudi Arabia.  In a casual sense, I don't think the IRA is providing training for Saudi rebels.

What do you think?

Sun, 03/06/2011 - 16:30 | Link to Comment RoRoTrader
RoRoTrader's picture

I thought you'd never ask, CH.

I think I need to "get my mind right" in the words of the Captain from the film Cool Hand Luke.

Seriously?.......that Ph.D Nancy Kobrin is one twisted sister. I skimmed over it again and followed a few links which led to Jihad Watch and David Horowitz and the Anti-Chomsky Reader and another to Nancy Kobrin with an article entitled The Destructive Nature of Envy and Why Arabs HATE Jews.

Back to the IRA for a moment; switch the culture/history remove Arab/Jew and insert others so the title can also read Why Irish Hate English or Why American (savage) Indians Hate Christian Whiteman (implied that Indians are dangerous to whiteman/whitewoman and suddenly a justifcation to kill arises from inciting fear of somone 'different' - read another way also a strategy to rationalize and justify war against evil but real intent is to find a way of taking something belonging someone else).

Christians and Jews.......wonderful peoples.

And, that whole thing about Noam Chomsky looks like a permanent smear campaign designed to paint Chomsky as an anti-American, communist sympathsizer, Holocaust denier, justifying 911 attacks, liar, manipulator and distorter of language........almost forgot MoFo.

Maybe Kobrin can write a paper and name it The Destructive Nature of Envy and Why Horowitz Hates Chomsky.

I wonder if she fucks as nasty as she writes?

Sun, 03/06/2011 - 23:44 | Link to Comment Canucklehead
Canucklehead's picture

So if I understand you comment correctly, you really, really like Nancy Kobrin because she is a bad, bad girl who is bright.  You are afraid she would spurn your sexual advances because she doesn't like Moan Champsky, so it is unlikely she wood screw around with someone like you.

Is that the focus of your post?

Sat, 03/05/2011 - 23:39 | Link to Comment Abitdodgie
Abitdodgie's picture

tHE WORLD IS NOT RUNNING OUT OF OIL BY THE FIRST CHART ABOVE SAYS AT THE CURRENT RATE OF USE IT WILL LAST FOR ANOTHER 62 YEARS (sorry cap lock was on ) What is changing is the cost of getting that oil , There is lots of oil you are just going to have to pay for it, The American Government all ready uses Ion propulsion systems (B2 bomber)and electromagnetic generators / engine, but whilst there is oil they will keep control and keep charging you . So it follows the more prices go up the more chance that they will loose control.

Sun, 03/06/2011 - 12:05 | Link to Comment malikai
malikai's picture

Ion thrusters on a B2.. Are you high?

Sun, 03/06/2011 - 13:05 | Link to Comment nonclaim
nonclaim's picture

Well, the blue glow in the dark sky would be a wonderful sight... plus the ozone hole (still there?) would fill up quickly.

Sat, 03/05/2011 - 23:48 | Link to Comment Yen Cross
Yen Cross's picture

I won't even get into overnight swap rates, and the ECB scumbags that carry that trade. Libor is Dead!

Sat, 03/05/2011 - 23:56 | Link to Comment Caviar Emptor
Caviar Emptor's picture

I think the big tell was not the Whoring (Giving away $37 Billion to angry citizens). It's today's banning of mass demonstrations planned for Friday as a "day of rage" by the Saudi Interior Ministry, and sending security forces to the North Shia stronghold. Wants some sticks with that carrot? 

Sat, 03/05/2011 - 23:59 | Link to Comment Kurtieboy
Kurtieboy's picture

"...buying stabability...". What a joke the US is doing the exact same thing except they are financing it by borrowing and printing money.

Sun, 03/06/2011 - 00:00 | Link to Comment sschu
sschu's picture

The question is the oil price threshold before we go "back" into major recession or depression.  In 2008 the price was about $150 for a while IIRC, and we all know what happened that September.  The risks were different then, housing was due to crash and the money center banks were heavily exposed to this risk.

Today it seems the risk category is the Federal government (and to some degree state and local governments).  They already are borrowing $1.5T, they need to roll-over additional debt (another trillion?).  So if tax revenues decline significantly, which they will now and may decrease a lot more when oil hits $150, the Federal government is facing an even greater funding crisis than at present.  Government costs rise in a recession and there is little movement toward austerity.

The result will be massive monetary debasement via the Fed ($5T annual for 3 years?) or financial asset confiscation, ie your 401K turns into 100 year treasury bonds with a paltry real return.

This oil shock could be the end.


Sun, 03/06/2011 - 09:36 | Link to Comment MolotovCockhead
MolotovCockhead's picture

You mean 401K turn into 101K or could it be 10.1K.........whichever way you look at it, the end is near.......

Sun, 03/06/2011 - 00:10 | Link to Comment Misean
Misean's picture

I guess printing more money is the proper response then.

Sun, 03/06/2011 - 00:12 | Link to Comment Oh regional Indian
Oh regional Indian's picture

How can they do this to us Asians? Hmmm?

This whole complex of refineries being separated from the source was such a masterful ploy to make sure that the supply could be disrupted at will. The most convoluted supply chain is now going to show itself to be it's own achilles heel. 

I think profit potential is now out of the window. All the game are geo-political now!


Sun, 03/06/2011 - 00:59 | Link to Comment Caviar Emptor
Caviar Emptor's picture

All the game are geo-political now!

It always was.  Saudi Arabia was founded with the blessing and financing of Great Britain. Arab-American Oil Company (Aramco) was formed through British and American backing for Standard Oil and Texaco. There are many dirty little secrets that have come out of this arrangement, too many to enumerate. 

Sun, 03/06/2011 - 01:46 | Link to Comment Oh regional Indian
Oh regional Indian's picture

True Caviar. Something tells me a lot of secrets are going to get spilt soon. I'm sure lot's of folks caught the story of Egypt's State Security HQ being overrun.

Can you imagine what people have in their hands right now? 

Truly, literal, figurative and fractally, this is the time of Revelations.

Bated breath, I think this Egypt thing will reverberate through the world in the coming weeks.


Sun, 03/06/2011 - 12:03 | Link to Comment samsara
samsara's picture

There are many dirty little secrets that have come out of this arrangement, too many to enumerate. 

The only thing new in the world is the history you don’t know.

Harry Truman
Sun, 03/06/2011 - 07:03 | Link to Comment EscapeKey
EscapeKey's picture

Well, they raised the export price for us Europeans as well, while lowering American? This wouldn't happen to have anything to do with the Royals needing c/overt American military protection, or am I just a cynic?

Sun, 03/06/2011 - 09:22 | Link to Comment Oh regional Indian
Oh regional Indian's picture

You are just a cynic EscapeKi!


Sun, 03/06/2011 - 10:32 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture


hi, EK:  one thing nobody seems to even consider, at least as presented here, by "one-nut" tyler, who can't get a big enuf french smooch onto jim roger's rosette, is the possibility that the saudi's may be making some of these "price changes" due to currency fluctuations around the US Dollar and/or its ongoing debasement via "QE", which is designed to "reflate assets"b/c DEflation is BAD.  which it is, i guess for central banks and broke zombie leveraged highhighhigh rollers.  but not for you, and me, and our friends and neighbors, and children. 

i don't have the data or the time to work it, right now, and maybe i'm just obviously wrong.  anyone?

there seems to be no end to the line of "experts" who understand oil, peak oil, future oil, saudi oil, north sea oil, texas intermediate oil, alberta sands oil, alaskan oil, venezuaelan oil, egyptian, lybian, mexican, and slewie's fave, palm oil! 

please don't ferget to keep one eye on the banksterz, their interlocking intel agencies, and the puppet nations which act as their proxies in "international affairs", which, i can see you are Royally up to, already.

if we, as humans, are to work through this amazing mess, together, somehow, will it not be from human values, on a human scale, hand-to-hand, starting now?


Sun, 03/06/2011 - 12:19 | Link to Comment bretondog
bretondog's picture

if we, as humans, are to work through this amazing mess, together, somehow, will it not be from human values, on a human scale, hand-to-hand, starting now?



Thank you

Sun, 03/06/2011 - 12:25 | Link to Comment bretondog
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Double post

Sun, 03/06/2011 - 02:25 | Link to Comment RoRoTrader
RoRoTrader's picture

The 'bigger bigger' issue may be a coin toss to see if the market swings to bankrupt SA and then steal what is left or if OIL hits $125 by next Friday.

Tough call. Maybe both.

Sun, 03/06/2011 - 01:02 | Link to Comment RockyRacoon
RockyRacoon's picture

Little darling, it's been a long cold lonely winter

Sun, 03/06/2011 - 02:19 | Link to Comment RoRoTrader
Sun, 03/06/2011 - 01:06 | Link to Comment locinvestor
locinvestor's picture

Look at the signs:

The rulers pay off the population with "raises".

They raise their exports to continue to buy credibilty in Europe.

While at first these seem like sensible steps to protect their share of the global market, they're meaningless long term. Why? Because their oil supply is overestimated.

Now, assume that that's true. Assume that all the propaganda from the oil lobby is propaganda. This then is a "national emergency". What's Obama going to do about it?

Nothing. This close to an election, he won't piss off some of his biggest donors by forcing them to take action. Is he fighting the neocons on spending cuts and not raising the National Debt Ceiling? No. Will he risk not being a centrist? Again, no.

Another key point. Obama won't dare risk looking weak in any way. Repeal any Patriot Act laws? Spend more money to actually create more "New Deal" jobs? If he does the neocons will once again scream "socialist".

Place your bets on just how high can gas prices go.


Sun, 03/06/2011 - 10:54 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

please consider getting out for a short walk if you are still ambulatory.  take care in that if you hear the call of liberty, you may wish to join the parade.


Sun, 03/06/2011 - 03:31 | Link to Comment zebra
zebra's picture

so s this good for stocks??

Sun, 03/06/2011 - 03:46 | Link to Comment Yen Cross
Yen Cross's picture

Its all about stripes. Keep em crooked! Like a giant halibut on a checker board.

Sun, 03/06/2011 - 08:27 | Link to Comment gigeze787
gigeze787's picture


Compassionate 'conservative' love?

Sun, 03/06/2011 - 08:53 | Link to Comment Sutton
Sutton's picture

I get the feeling everyone is going to get a stimulus check soon, directly from the Treasury.

Especially those with a surfeit of melanin who suffer most.

Sun, 03/06/2011 - 09:16 | Link to Comment Bobbyrib
Bobbyrib's picture

Couldn't Europe just go to the WTO and complain that they are price fixing for certain regions of the world?

Sun, 03/06/2011 - 09:38 | Link to Comment spanish inquisition
spanish inquisition's picture

Things will settle down once they crush the protesters. I will guess Hillary will treat it the same as we did with unruly kids in Europe, but they needed to be shot this time.

If things get out of line the Saudis can call Israel for some more mercenaries as the pipeline is still open from shipments to Egypt.

Our two weapons are fear and surprise...and ruthless efficiency...

Sun, 03/06/2011 - 10:54 | Link to Comment props2009
Sun, 03/06/2011 - 10:56 | Link to Comment FrankIvy
FrankIvy's picture

Damn unintentionally prophetic Mayans. 

Sun, 03/06/2011 - 11:08 | Link to Comment bugs_
bugs_'s picture

Pumped out.

Sun, 03/06/2011 - 12:35 | Link to Comment FatFingered
FatFingered's picture

It's only called 'Whorism' when the monies, generally created from nothing, is given to the peasantry and not the PD, Big Banks, or corporate cronies.

I guess?  I thought ZH was a voice for the us peasantry?!?!?!?


Sun, 03/06/2011 - 13:38 | Link to Comment Flakmeister
Mon, 03/07/2011 - 20:35 | Link to Comment lsjcma
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