April 08, 2024 [Oil Price]- Saudi oil giant Aramco, the world’s top crude oil exporter, hiked on Friday the prices of most of its crude grades for May, as Middle Eastern benchmarks are strengthening in a market that looks increasingly tight.
For a second consecutive month, Saudi Arabia raised the price of Arab Light, its flagship grade selling in Asia, by more than expected.
Aramco set the official selling price (OSP) of Arab Light for Asia for May by $0.30 per barrel to a premium of $2.00 over the Oman/Dubai average, the benchmark off which Middle Eastern crude going to Asia is priced.
This is the second consecutive increase in the price of Saudi oil selling in Asia, after Aramco had raised in March the OSPs for Asian buyers for April, following the extension of the OPEC+ production cut agreement until the end of the first half of the year. The price for the country’s flagship Arab Light grade was raised by $0.20 per barrel over the Oman/Dubai average for April.
Now the increase for May is $0.30 per barrel, the upper end of refining sources’ expectations polled by Reuters earlier this week. The Reuters survey of five refining sources showed that they expected Arab Light crude prices for May to be hiked by between $0.20 and $0.30 per barrel over the Middle Eastern benchmark. A Bloomberg survey of traders and refiners expected an increase of $0.10 per barrel.
Middle Eastern crude benchmarks have rallied in recent days, along with the increase in the entire crude complex as Brent prices topped $90 per barrel this week amid a tightening market and geopolitical concerns in the Middle East.
Saudi Arabia typically announces around the fifth of each month its crude pricing for the following month and doesn’t comment on price changes. This week, the OSPs came after the OPEC+ group’s Joint Ministerial Monitoring Committee (JMMC) did not recommend any changes to output policy at its meeting on Wednesday.
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