Refinery industry sources, as reported by Reuters, indicate that Saudi Arabia is likely to reduce its official oil prices for Asian buyers by $0.40 to $0.50 per barrel.
The expected price adjustments are predicted to primarily impact Saudi Arabia’s flagship Arab Light crude. However, other grades of crude are also anticipated to see price reductions, though by smaller amounts, ranging between $0.30 and $0.45 per barrel.
This forecast follows OPEC+’s decision to maintain its current supply levels. The oil cartel is set to meet later today, with most analysts predicting an announcement of a 410,000-barrel-per-day production increase for July. Sources in the refinery sector suggest that this supply boost will likely apply downward pressure on Saudi oil prices.
Earlier this year, in line with OPEC’s production increase, Saudi Aramco lowered its official crude prices. In March, the price of Arab Light crude was reduced by $0.40 per barrel, while Arab Extra Light saw a cut of $0.60 per barrel.
Despite these earlier price cuts, Saudi Arabia raised its oil prices for Asia this month, signaling strong demand. For June, the price of Arab Light crude was raised by $0.20 per barrel, making it $1.40 higher than the Oman/Dubai average—a key benchmark for Middle Eastern oil exports to Asia.
Given the current market dynamics, it remains uncertain how Saudi Arabia will adjust its official prices. However, analysts believe a price reduction is more likely as Saudi Arabia aims to reclaim market share it lost following the production cuts agreed upon by OPEC+ in 2022.
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