Saudi Arabia May Slash October Crude Prices for Asia

Saudi Arabia May Slash October Crude Prices for Asia

Due to weak demand in the region and rising arbitrage shipments, the world’s top oil exporter Saudi Arabia may lower October prices for the majority of crude grades it delivers to Asia, Reuters reported.

According to five refinery sources surveyed by Reuters on August 29, the state-owned oil company Saudi Aramco may reduce the official selling price (OSP) for its flagship Arab Light crude by roughly $4.50 per barrel in October.

After raising September OSPs to record high levels of $10.95 per barrel for Arab Extra Light against the Oman/Dubai average and $9.80 per barrel for Arab Light, it would be the first price decrease for Saudi Arabia in four months.

When setting pricing, Saudi Arabia frequently draws inspiration from Dubai’s market structure, which represents the price spread between the first and third months. The spread decreased by roughly $4.26 per barrel in August.

“The overall demand in Asia is not very strong. As more arbitrage cargoes from the United States and West Africa flow into Asia, supply tightness concerns have mostly eased,” said one respondent.

Saudi Aramco bases the cost of its crude on suggestions from clients as well as an analysis of the change in the oil’s value over the previous month using yields and product prices.


Welcome! Login in to your account

Remember me Lost your password?

Don't have account. Register

Lost Password