China has had a surging appetite for energy, including gasoline. (AP Photo)
OPEC’s quest to end a global crude glut already snapped a two-year slump in oil prices. Now attention is turning to how the group’s surprise decision to cut output will transform international trade flows of the world’s most important commodity.
The early signs are that Middle East suppliers will prioritize Asia, pushing competitors in Africa and the Americas to keep cargoes in the Atlantic region. Saudi Arabia has indicated it will initially maintain most flows to fast-growing Asia, while draining more heavily oversupplied Western regions. Kuwait is doing much the same.
“They want to keep their market share to Asia,” Olivier Jakob, managing director at Petromatrix GmbH in Zug, Switzerland, said of Middle East suppliers. “The routes they will restrict the oil flow most will be to the U.S. and Europe.”
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