June 06, 2024 [Reuters]- Saudi Arabia set its flagship Arab Light crude oil official selling price (OSP) to Asia at plus $2.40 versus Oman/Dubai average for July, a document seen by Reuters showed on Wednesday.
That marks a 50 cent per barrel cut from the June OSP, the first cut in five months and towards the lower end of market expectations according to a Reuters survey.
Its OSPs for other crude grades sold to Asian customers were slashed by 40-60 cents, the document showed.
Refining sources expected state oil giant Saudi Aramco to cut its prices in Asia because of falling Middle East crude benchmarks and weaker profit margins for Asian refiners.
The potential price reduction for Asia, which accounts for 82% of Saudi Arabia’s oil exports, underscores the pressure faced by producers in the Organization of the Petroleum Exporting Countries (OPEC), amid robust non-OPEC supply growth and a global economy facing headwinds.
OPEC agreed to extend most of its deep oil output cuts well into 2025 at its meeting on June 2, as it seeks to shore up the market against tepid demand growth and high U.S. production.
Aramco also set the Arab Light OSP to Northwest Europe at plus $3.10 versus Ice Brent, a hike of $1 per barrel from June, according to the document.
It hiked its OSPs to both Northwest Europe and the Mediterranean by $1 per barrel across the board.
For buyers in the United States, the Arab Light OSP was set at plus $4.75 versus ASCI. All of its July OSPs to the United States were unchanged from June levels, the document showed.
Aramco sets its crude prices based on recommendations from customers and after calculating the change in the value of its oil over the past month, based on yields and product prices.
Saudi crude OSPs set the trend for Iranian, Kuwaiti and Iraqi prices, affecting about 9 million barrels per day (bpd) of crude bound for Asia.
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