Saudi Arabia raises May Arab Light crude prices for Asia for third month
OPEC+ is cutting production, which will increase prices.
Saudi Arabia, which is the largest oil exporter in the world, has increased the price of its flagship crude to Asian buyers for the third consecutive month.
The official selling price of May-loading Arab Light for Asia has been raised from April by 30 cents per barrel to $2.80 per barrel compared to Oman/Dubai quotations.
The price rise is in line with a Reuters study of Asian refiners. It also follows a cut in production from the Organization of the Petroleum Exporting Countries (OPEC+), which is expected tighten the Middle East supply.
The OPEC+ Group surprised the market on Sunday when it announced a 1,16 million barrels of oil per day (bpd), from May through the rest the year.
Saudi Arabia raised its OSPs by 30 cents each for Arab Medium, and Arab Heavy crude grades, which contain more sulfur, than Arab Light.
The price hike on Arab Heavy is due to a higher demand in the region for heavier crude, as more refineries are being built that can process heavy grades, like PetroChina's Jieyang facility.
Higher OSPs will undoubtedly reduce refiners' profit margins. A Singapore-based trader said that the main question was when and if Saudi Arabia's production cut would have an impact on its supply to term buyers.
You can get more supplies from Russia, Africa, and the Americas.
The top oil exporter has set its Arab Light Oil Supply Program (OSP) to Northwest Europe at $1 a bar above ICE Brent in May, which is unchanged from April.
The OSP for the United States has been raised 10 cents compared to last month, at $6.75 ASCI.