Middle Eastern oil exporters will continue to resort to “creative strategies” to retain their market share in Asia in the face of shifting global trade patterns and tougher competition, says Arab Petroleum Investments Corporation (Apicorp).
According to Apicorp, the Asia-Pacific region, particularly China and India, remain a major “source of growth” for the Middle Eastern oil exporters.
Iraq and Iran will rely on competitive pricing and attractive upstream contracts to entice Asian players. 
For Kuwait and Saudi Arabia, where the upstream sector is closed to foreign investment, securing a large downstream portfolio in Asia is part of a long-term strategy to consolidate their share in a key market. 
While competition is proving to be tough, strategies currently being pursued can result in long-term gains and further consolidate Asia-Middle East energy ties.
In its latest report, Apicorp said competition for Asian markets is intensifying. But the growing presence of Russian, West African and South American oil in Asia should not be exaggerated.
Short-term gains for such exporters can be expected as trade patterns continue to evolve and Asia seeks to diversify its supply sources. But this should not be seen as a threat to the Middle East’s exporters or their position in Asia’s ever-growing market. 
Middle Eastern producers such as Saudi Arabia, the UAE and Kuwait sit on some of the world’s largest reserves, operate some of its cheapest wells and have a historical record of being a reliable source of supply despite many geopolitical shocks.
As Asian oil demand continues to grow and as current cuts in capital expenditure start affecting supply growth outside the Middle East, the key Middle Eastern exporters such as Saudi Arabia, Kuwait, the UAE, Oman, Iran and Iraq - some with very ambitious plans to increase productive capacity - will consolidate their role as the main suppliers to Asia.
Competitive pricing has been the other main tactic to push higher volumes of crude into Asian markets. Iraqi crude exports have risen sharply this year and to sell these increased volumes, State Oil Marketing Organisation (SOMO) has been discounting its cargoes to Asia. The splitting of its crude stream to heavy and light has also helped by addressing some traders concerns about the quality of its exports. 
Iran has also discounted its oil sold into Asia: for October, November and December loadings, it narrowed the premium of its light crude over Saudi Arab Light to just $0.15 for a barrel.
Aggressive pricing in the past 18 months has triggered discounts from other Middle East producers, including Saudi Arabia and Kuwait. 
Middle Eastern exporters have also offered “attractive” payment schemes to buyers in Asia. Under these agreements, Iraq, Kuwait, and Iran have given some of their Asian customers - typically cash-squeezed Indian refineries a grace period of 60 to 90 days to pay for crude imports, equivalent to a $0.50-0.75 discount per barrel.