Key facts
- Saudi Arabia has slashed the official selling prices (OSPs) for its crude oil loading in July.
- The price of flagship Arab Light crude for Asia in July was reduced by $6 per barrel to a $9.50 premium over Oman/Dubai prices.
- All other Saudi crude grades to Asia were also cut by $6 per barrel.
- Crude for Mediterranean and Northwest Europe saw a $10 per barrel reduction against ICE Brent.
- Saudi crude for the U.S. in July is priced $2 per barrel lower against the ASCI benchmark compared to June.
- This is the second consecutive monthly price cut, following a weakening spot market.
Saudi Arabia has implemented a significant reduction in the official selling prices (OSPs) for its crude oil grades loading in July, continuing a trend from the previous month. This decision, widely anticipated by market participants, comes as demand from key Asian markets shows signs of weakening, and the premiums for spot Middle East crude have narrowed.
The price of Saudi Arabia's flagship Arab Light crude for delivery to Asia in July has been slashed by $6 per barrel, setting it at a premium of $9.50 per barrel over the average Oman/Dubai prices. This move aligns with expectations from Asian refiners, who had forecast a reduction of between $3 and $8 per barrel.
Across the board, Saudi Aramco reduced the OSPs for all other crude grades destined for Asia by $6 per barrel. Similar adjustments were made for other markets, with crude for the Mediterranean and Northwest Europe seeing a $10 per barrel reduction against ICE Brent. For U.S. customers, Saudi crude loading in July will be $2 per barrel cheaper relative to the ASCI benchmark compared to June.
The price cuts are a response to a softening spot market, evidenced by declining premiums for Dubai and Oman crude in May. This follows a $4 per barrel reduction in the June OSP for Arab Light crude to Asia, which was priced at $15.50 per barrel over Oman/Dubai, down from a record high premium in May.