Saudi Arabia Expected to Cut Its Oil Prices to Asia for October

September 2, 2024 Stu Turley Crude Oil News, International News, OPEC +, Top News
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  • Saudi Aramco is expected to cut the OSP of its crude oil for Asia in October.
  • The cut is likely due to weaker refining margins in China and the wider Asian region.
  • The decision could also be influenced by the Dubai benchmark price and OPEC+’s hints of easing production cuts.

Worsening refining margins in China and the wider Asian region and weaker Dubai benchmark prices could make the world’s top crude oil exporter, Saudi Arabia, reduce the price of its crude loading for Asia in October, a Reuters survey of refining industry sources showed on Monday.

Saudi Aramco, the world’s top crude oil exporter, is expected to cut the official selling price (OSP) of all its crude grades for Asia in October, according to the survey of five refining sources. Three of these Reuters sources expect the flagship Saudi crude grade, Arab Light, to be priced $0.50 to $0.70 per barrel lower than the September prices. A cut of $0.70 would make Arab Light cost Asian refiners $2.00 per barrel above the Oman/Dubai average.

The Oman/Dubai average is the benchmark on which Middle Eastern crude exports to Asia are priced.

The expected drop in Arab Light prices and the prices of the heavier grades could track the weaker Dubai prices in August, according to the refiners polled by Reuters.

However, other refiners expected unchanged or little-changed Saudi crude prices for Asia for October in view of some strength in the Dubai prices in the last week of the trading window of August.

Saudi Arabia typically announces its OSPs for the following month around the fifth of each month and does not comment on the pricing.

Apart from the trend in the Dubai benchmark, the Saudi OSPs for next month could be influenced by weak refining margins in Asia, especially in China, according to the refiners in the Reuters survey.

Generally, refiners expect small changes to the Saudi crude prices for Asia, but they are all expected to be lower compared to the September prices.

Last month, Saudi Aramco raised the price of its light crude for Asian clients for the first time in three months.

Global supply from Saudi Arabia and the Middle East for October could be ample, considering that OPEC+ is dropping hints that it could begin easing part of the production cuts that month.

By Charles Kennedy for Oilprice.com

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About Stu Turley 4798 Articles
Stuart Turley is President and CEO of Sandstone Group, a top energy data, and finance consultancy working with companies all throughout the energy value chain. Sandstone helps both small and large-cap energy companies to develop customized applications and manage data workflows/integration throughout the entire business. With experience implementing enterprise networks, supercomputers, and cellular tower solutions, Sandstone has become a trusted source and advisor.   He is also the Executive Publisher of www.energynewsbeat.com, the best source for 24/7 energy news coverage, and is the Co-Host of the energy news video and Podcast Energy News Beat. Energy should be used to elevate humanity out of poverty. Let's use all forms of energy with the least impact on the environment while being sustainable without printing money. Stu is also a co-host on the 3 Podcasters Walk into A Bar podcast with David Blackmon, and Rey Trevino. Stuart is guided by over 30 years of business management experience, having successfully built and help sell multiple small and medium businesses while consulting for numerous Fortune 500 companies. He holds a B.A in Business Administration from Oklahoma State and an MBA from Oklahoma City University.

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