SINGAPORE: The world’s biggest oil exporter Saudi Arabia may cut its crude prices for Asian buyers in July to the lowest in six months, refiners said, tracking losses in benchmark prices driven by rising supply from OPEC+.
The July official selling price (OSP) for flagship Arab Light crude may drop by 40 to 50 cents to between 90 cents and $1 a barrel from the previous month, four Asian refining sources said in a Reuters survey.
Such a cut would put the Arab Light OSP in July at the lowest since January, Reuters data showed.
Saudi crude OSPs are usually released around the fifth of each month, and set the trend for Iranian, Kuwaiti and Iraqi prices, affecting about 9 million barrels per day (bpd) of crude bound for Asia.
For other Saudi grades, the July OSPs for Arab Extra Light, Arab Medium and Arab Heavy crude are expected to decrease by 30-45 cents a barrel from June, the survey showed.
Oil prices have tumbled since OPEC+, which includes the Organization of the Petroleum Exporting Countries and allies such as Russia, agreed to increase production by nearly 1 million barrels per day (bpd) in April, May and June.
Eight OPEC+ countries, set to meet on Saturday, may decide to raise output in July by a further 411,000 bpd, sources have said.
The supply hikes have come just as global economic growth faces headwinds from a tariff war launched by the US In a bearish sign, some crude cargoes remained unsold from the previous month, one of the survey respondents said.
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Rising supplies have weighed down Middle Eastern benchmarks this month, with the average cash Dubai premium to swaps at $1.21 per barrel as of May 27, down 45 cents from April’s average.
State oil giant Saudi Aramco sets its crude prices based on recommendations from customers and after calculating the change in the value of its oil over the past month, based on yields and product prices.
Saudi Aramco officials as a matter of policy do not comment on the kingdom’s monthly OSPs.
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