RIYADH: Saudi Aramco has adjusted its pricing for Arab Light crude oil sold to Asia for September, increasing it to Platts Dubai/DME Oman +$2 per barrel, up from +$1.80 in August.
This marks a two-month high for the Arab Light grade, though the increase is smaller than anticipated. Other light grades sold to Asia have also seen price hikes, but the prices for Arab Medium and Arab Heavy grades remain unchanged.
The official selling price for Arab Medium was maintained at +$1.25 per barrel, while Arab Heavy kept at $+0.50 per barrel.
For Northwest Europe, the Arab Light official selling price (OSP) was set at +$1.25 per barrel over ICE Brent futures, down significantly from +$4 per barrel. Similarly, the price for Arab Medium was reduced from +$3.20 to +$0.45 per barrel.
These adjustments come despite expectations for a larger increase due to recent gains in the Dubai benchmark. The more modest price hikes are attributed to weaker refining margins in Asia and ongoing negotiations for annual term supplies.
Aramco’s pricing decisions are influenced by customer recommendations and changes in the oil’s value over the past month, considering yields and product prices.
Last week, top ministers from the Organization of the Petroleum Exporting Countries and allies led by Russia, or OPEC+ as the group is known, decided to keep its oil output policy unchanged including a plan to start unwinding one layer of output cuts from October.
The oil producers’ alliance also reiterated that the hike could be paused or reversed if needed.
OPEC+, in a statement, said the members making those cuts “reiterated that the gradual phase-out of the voluntary reduction of oil production could be paused or reversed, depending on prevailing market conditions.”
These countries had announced the extension of the voluntary reduction of oil production by 2.2 million barrels per day until the end of September 2024 and outlined plans for this reduction to be gradually phased out on a monthly basis until the end of September 2025.
Oil prices have fallen from a 2024 high above $92 a barrel in April to below $82, pressured by concern about the strength of demand but finding support this week from increasing tensions in the Middle East.
OPEC+ in total is currently cutting output by 5.86 million bpd, or about 5.7 percent of global demand, in a series of steps agreed since late 2022.
Source: Arab News
