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OPEC's oil giants give the trading house a run for their money



OPEC currently limits production to keep oil prices tumbling in an exaggerated market that fears weak demand growth. But the national oil companies (NRC) in the cartel's largest producers think in the long term and shy away from a large piece of oil trading cake.

The state oil companies of OPEC's largest producers – Saudi Arabia, Iraq and the United Arab Emirates (UAE) plan to significantly increase their respective oil companies in search of additional lucrative revenue sources from the major commercial and marketable oil resources they own. The NOCs in the eastern producers are already competing with the largest independent oil companies such as Vitol, Trafigura, Glencore, Mercuria and Gunvor.

In this competition, NOCs have a great advantage over independent oil companies, and it is the fact that NOCs own their oil.

According to a S & P Global Platts analysis, state-controlled companies make up 76 percent of the oil production of the world's 25 largest oil companies in terms of oil spills. In other words, government-led giants in the Middle East, Russia, China, Mexico, Venezuela and Brazil pumped more than three-quarters of the 58.65 million bpd produced by the world's largest oil companies in 201

7, according to S&P Global Platts analysis based on Platts data. International Energy Agency (IEA) and company registrations.

Now, OPEC's oil companies are set to increase competition in the oil treatment by expanding and opening trade offices around the world and looking at significantly increasing their oil companies and volumes. Related: EU slack sanctions on Turkey for illegal offshore drilling

Just earlier this week, an exclusive Reuters piece reported the Abu Dhabi National Oil Company (ADNOC) pumping most of the crude Oil By OPEC's third largest producer, the UAE, plans to launch its own oil reference for the region, possibly as soon as November, as part of an effort to increase its regional influence and strengthen its oil trading business. The oil labeling idea is part of a broader ADNOC plan to overhaul the oil company division and get more price impact for the oil sales. Earlier this year ADNOC entered into strategic partnership agreements with Italy's Eni and Austria OMV, where the European oil companies bought minority interests in ADNOC Refining, and the three companies agreed to create a trading company.

Before ADNOC, saudi Aramco – the world's largest oil producer and the kingdom's state giant – began expanding its oil business, aiming to be a top-oil trader to open up new sales habits for the oil and ensure that Saudi crude oil has a market as long as the work needs oil, which Aramco believes will be for decades and decades to come.

Earlier this year, Aramco Trading was said to be looking to open an office in London to support its expanding trade in oil trade.

Aramco has already hired employees and promoted their plans to launch trading on the London desk, market sources told S & P Global Platts this week.

Aramco Trading expects its oil business to grow to 6 million bpd next year, the company said last year, announcing the opening of its second international office in Fujairah, UAE, as part of its "global push into new markets to secure buyers for refined products as well as crude oil. " Related: China's Refineries Hit New All-Time Operating Record

To compare, Independent Oil Company Vitol, for example, trades over 7 million bpd of crude oil and refined products, with the crude trade around 3.8 million bpd.

"Aramco Trading has experienced significant growth in recent years," said Aramco Trading, President and CEO Ibrahim Al-Buainain last month. "We started in 2012 with 600,000 to 700,000 bpd, and now we operate over 4 million bpd. – and as the business activity grows to the level we want to reach 8-10 million bpd – Aramco Trading will grow with that business, Al-Buainain said.

In a statement about the company's trading behavior last year, the manager said:

"In 2018, the company took a step further towards achieving its goal of being one of the top three trading houses worldwide."

The State Oil Market Organization (SOMO) in Iraq, OPEC's second largest producer behind Saudi Arabia, also wants to expand its oil business with more spot sales and with opening offices outside Iraq. 19659002] With plans to significantly increase its trading activity, the state oil companies of OPEC's largest oil producers will soon give independent oil companies a run for their money.

By Tsvetana Paraskova for Oilprice.com

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