Oil Price Decline Prompts Saudi OSP Price Rethink in September

Oil Price Decline Prompts Saudi OSP Price Rethink in September

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.

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