Riyadh, 5 August 5, 2024 (TDI): Saudi Aramco has adjusted its pricing for Arab Light crude oil sold to Asia for next month, 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 hike is smaller than anticipated. Other light grades sold to Asia have also seen price increases, but the prices for Arab Medium and Arab Heavy grades remain unchanged.
The official selling rate 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 was set at +$1.25 per barrel over ICE Brent futures, down considerably from +$4 per barrel. Likewise, the price for Arab Medium was reduced from +$3.20 to +$0.45 per barrel.
These adjustments come despite expectations for a larger hike due to recent gains in the Dubai benchmark. The more modest price increases are attributed to weaker refining margins in Asia and ongoing talks 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 product prices and yields.
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 production policy unchanged including a plan to begin unwinding one layer of output cuts from October.
The oil producers’ alliance also reiterated that the increase could be paused or reversed if needed.
OPEC+, in a statement, said the members making those reductions reiterated that the gradual phase-out of the voluntary cuts of oil production could be paused or reversed, depending on prevailing market conditions.
These countries had announced the extension of the voluntary cut of oil production by 2.2 million barrels per day until the end of September and outlined plans for this reduction to be gradually phased out on a monthly basis until the end of September 2025.
