(Oil Price) – Saudi Arabia, the world’s top crude oil exporter, is expected to slash the price of its oil loading for Asia in May to the lowest level in three months amid a slide in regional benchmarks, a Reuters survey of Asian refining and trading sources showed on Friday.
Saudi oil giant Aramco is set to slash its official selling price (OSP) for the Arab Light grade by between $1.80 and $2 per barrel to Middle Eastern benchmarks for cargoes loading for Asia next month, according to the survey.
As a result, the flagship Saudi crude, Arab Light, could be priced in May at a premium of $1.50-$1.70 over the Oman/Dubai average, the benchmark off which Middle Eastern crude going to Asia is priced.
The Arab Light price for April is set at $3.50 over the Oman/Dubai average, after the Saudis cut early this month the prices for Asia for April by $0.40 per barrel.
The pricing for May could see much steeper reductions, in light of the falling international and Middle Eastern benchmarks over the past weeks, the participants in the Reuters survey said.
The biggest cut is expected for Arab Extra Light, whose price could be slashed by $1.95 per barrel to a premium of $1.35 over Oman/Dubai, the poll showed.
Saudi Arabia typically announces around the fifth of each month its crude pricing for the following month and doesn’t comment on price changes. It also sets the tone for the pricing to Asia of the other major oil producers in the Middle East.
The expected reductions in Saudi Arabia’s prices for Asian customers will come as the OPEC+ group begins adding more supply to the market in April. A price cut will also track weakening Middle East benchmark prices, as Russian oil appears to regain customers in the key Asian markets China and India, following the initial confusion in the wake of the U.S. sanctions on Russian oil trade from January.
By Tsvetana Paraskova for Oilprice.com
