( Bloomberg) -- Middle East oil producers already scrapping for share in Asia must now contend with more supply from Russia.
Russia, the world’s second biggest crude producer, boosted sales to China, Japan and South Korea by 25 percent last year, increasing its portion of shipments to 8.7 percent, from 7.2 percent in 2013, according to government data compiled by Bloomberg. Saudi Arabia accounted for 24 percent, down from 26 percent, while Qatar and Kuwait also ceded market share.
Gulf producers are now offering record discounts for Asian buyers amid a global crude glut. As European demand weakens and shale takes the U.S. closer to energy self-sufficiency than at any time since the 1980s, suppliers are focusing on Asia, which the International Energy Agency forecasts will replace the Americas as the biggest consuming region this year. Rising sales to Asia are helping Russia’s economy weather the conflict in Ukraine, sanctions and collapsing energy prices.
“Asian customers want to diversify supplies and Russia has the crude so it’s a win-win situation,” Victor Shum, a Singapore-based vice president at IHS Inc., said by phone Tuesday. “The alternative for Russia is shipping crude to the west, to Europe, but Europe is not a region with growing demand. Asia is the place.”
Russia sold about 51 million metric tons of crude to China, Japan and South Korea last year, from 41 million in 2013, the data show. The countries, three of the region’s four largest oil consumers, imported a total of 592 million tons. Comparable data for India, the fourth, are not available