Algeria started selling its oil at loss

To cover even the variable part of its operating costs, Algeria has to sell its oil between 15 and 20 dollars. Saharan Blend is currently trading at less than $15, i.e. below the threshold for the closure of industrial units.

Algeria officially enters this week in a hellish spiral. Since last Monday, Algeria has been selling its oil at a loss. And the losses are huge. Since the beginning of this week, Sahara Blend, that is Algerian oil, has been sold on the world market at $14.19

The price of the basket of fourteen crude oils (ORB), which serves as a reference for the OPEC, was $14.63 on Tuesday, according to data from the Organization of Petroleum Exporting Countries published Wednesday on its website.

The OPEC reference basket of crude oil, introduced in 2005, started the week at $14.19. It includes Saharan Blend (Algeria), Girassol (Angola), Djen (Congo), Oriente (Ecuador), Zafiro (Equatorial Guinea), Rabi Light (Gabon), Iran Heavy (Iran), Basra Light (Iraq), Kuwait Export (Kuwait), Es-Sider (Libya), Bonny Light (Nigeria), Arab Light (Saudi Arabia), Murban (United Arab Emirates) and Mery (Venezuela).

At 14.19 dollars a barrel, the Algerian oil company Sonatrach is losing on average between 5 and 6 dollars a barrel, as the average cost of a barrel of oil produced in Algeria is 19 dollars, according to several sources within Sonatrach.

On average, the oil extraction at the Sonatrach production sites in the south of the country costs 12 dollars a barrel. To this price must be added about 2 to 3 dollars for the cost of transport and pipelines. With the additional various taxes and fixed charges, the average price of the oil barrel reaches 19 to 20 dollars.

With the current prices, Sonatrach is losing more than 5 dollars per barrel. This represents the equivalent of a loss of $5 million per day, or no less than $150 million per month. This amount represents only Sonatrach’s dry loss on its oil sales.

Posted by on April 29, 2020. Filed under Business, News, Zoom. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.