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Saudi Arabia cuts European oil prices

Saudi move comes as Iran expected to return to oil markets

Baku. 6 January. REPORT.AZ/ Saudi Arabia has slashed its crude-oil prices for Europe in a move that could undercut Iran as sectarian tensions escalate between the rivals and Iran prepares to increase oil exports.

Report informs citing The Wall Street Journal, Saudi Arabian Oil Co., the kingdom’s state-owned oil company, said it was deepening its discount to various regional benchmark prices for its light crude by $0.60 a barrel to Northwest Europe and by $0.20 a barrel in the Mediterranean for February delivery. Iranian oil professionals interpreted the move as a way to compete with Iran returning to the oil markets.

Riyadh and a number of Sunni Muslim capitals have severed or downgraded diplomatic ties with Iran after the Saudi embassy was set on fire in Tehran following the execution in Saudi Arabia of a Shiite cleric. Iran is likely to increase its exports after the expected end of Western sanctions over its nuclear program. In Iraq, Shiite politicians and religious leaders urged their followers to protest against the execution, Matt Bradley and Ghassan Adnan report. Sunni extremist group Islamic State threatened to destroy Saudi Arabian prisons holding jihadists in the wake of the execution.

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