Saudi Arabia is expected to raise prices for its crude exports to Asia in September due to a stronger Dubai benchmark, traders and analysts told Reuters. At the same time they cautioned that Saudi Arabia was unlikely to push prices up too high, a move that could pose a threat to the country’s market share.
Saudi Aramco normally determines its crude prices on a monthly basis both by listening to the recommendations of customers and utilizing a formula that follows the lead of Dubai’s product prices.
The official selling price (OSP) for flagship Arab Light crude in September could rise by $1 a barrel from August, if Dubai is taken as an example, while customer-advised adjustments would prefer no more than a 60 cents increase, according to a survey of five refiners and traders
The Saudi stock market has already been suffering when oil prices reached a six-month low, said Al-Arabiya. Consequently the stock market benchmark dropped by 3.2% to 8,808 points, with shares reaching their lowest point since April. Saudi petrochemicals giant SABIC lost 5.2% in its share prices alone.
The Saudi equities market was seen as the most negative in the Middle East, after Turkey. Hence, the OST pricing dilemma.