Tiny oil cartel Opec crude producer Qatar is paying the price for top member Saudi Arabia’s oil strategy in Asia.
Last year, oil exports from Qatar to Japan slumped by almost a quarter to its lowest level since 1990, while shipments from giant supplier Saudi Arabia grew 8.1%, boosting its market share in the Asian nation to a record figure.
The diverging fortunes may be a reflection of Saudi Arabia’s strategy to retain market share in Asia, the world’s biggest oil-consuming region, while leading oil-production cuts by Opec to clear a global glut. Stakes remain high, with oil prices still languishing at about 40% lower than their peak in 2014.
This is enabling it to nudge out smaller rivals, according to the Japan Oil, Gas and Metals National Corporation (Jogmec).
“Qatar is suffering from the repercussions of Saudi’s sales strategy,” Takayuki Nogami, the chief economist at state-backed Jogmec, said by phone. “With crude prices still much lower than their peak, losing sales volume to Japan and South Korea is a double blow to Qatar.”
Japan’s crude imports from Qatar fell 23% to 86-million barrels in 2017, according to data from the ministry of finance. South Korea’s imports from the nation fell to 65-million barrels last year, the lowest since 2010, according to data from state-run Korea National Oil Corporation.
From Saudi Arabia, shipments to Japan rose 8.1% last year, while market share rose to a record 40.2% in 2017. South Korea’s crude imports from Saudi Arabia slipped 1.6% to 319-million barrels, down from the highest — seen in 2016 — since at least 1980.