Saudis expand oil price war downstream

THE undisputed king of oil and gas is making some moves that could change the face of the global refining sector.

In June 2015, Saudi Arabia pumped a record 10.564 million barrels a day, a record level. As if being the world's biggest exporter of oil was not enough, the desert kingdom is now looking to conquer the refining sector as it has quickly become the fourth largest refiner in the world.

Said Fereidun Fesharaki of FGE Energy: "Saudis have moved into the product business in a big way." With Saudi Arabia's refined fuel contributing to the global supply glut, what will be its impact on the refining markets especially those in Asia?

How will Saudi Arabia capture market share downstream?

A refinery's success is measured by its "gross refining margins". The gross refining margin is nothing but the difference between the value of the refined products and price of the crude oil. In the case of Saudi Arabia, the price of crude oil would be extremely…