Saudi Arabia cuts July Arabian light crude OSP to Asia by Reuters

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By Robert Harvey

LONDON (Reuters) – Saudi Arabia has set its Arab Light main official selling price (OSP) for Asia at plus $2.40 above the Oman/Dubai average for July, a document seen by Reuters showed on Wednesday.

That represents a cut of 50 cents per barrel from the June OSP, the first cut in five months and toward the lower end of market expectations, according to a Reuters survey.

OSPs for other crude grades sold to Asian customers were reduced by 40 to 60 cents, the document showed.

Refining sources expect state oil giant Saudi Aramco (TADAWUL:) to cut its prices in Asia due to falling crude oil benchmarks in the Middle East and weaker profit margins for Asian refiners.

The potential price cut for Asia, which accounts for 82% of Saudi Arabia’s oil exports, underlines the pressure facing producers in the Organization of the Petroleum Exporting Countries (OPEC) amid robust supply growth from -OPEC countries and a global economy facing headwinds.

OPEC agreed at its June 2 meeting to extend most of its deep oil production cuts well into 2025 as it looks to shore up the market against tepid demand growth and high U.S. production.

Aramco also set the Arab Light OSP for Northwest Europe at plus $3.10 versus Ice, up $1 per barrel from June, according to the document.

It increased its OSPs to both Northwestern Europe and the Mediterranean by $1 per barrel across the board.

For buyers in the United States, the Arab Light OSP was set at plus $4.75 versus ASCI. All OSPs for July to the United States were unchanged from June levels, the document showed.

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Aramco sets its crude oil prices based on customer recommendations and after calculating the change in value of its oil over the past month, based on revenues and product prices.

Saudi crude oil OSPs set the trend for Iranian, Kuwaiti and Iraqi prices, influencing approximately 9 million barrels of crude oil per day bound for Asia.

Saudi forward crude deliveries to Asia are

priced as a difference from the

Oman/Dubai average:

JULY JUNE CHANGE

SUPER LIGHT 3.45

-0.50

2.95

EXTRA LIGHT 2.20 2.80 -0.60

LIGHT 2.40 2.90 -0.50

AVERAGE 1.95 2.35 -0.40

HEAVY 1.20 1.60 -0.40

Prizes at Ras Tanura intended for United

States oppose ASCI:

JULY JUNE CHANGE

EXTRA LIGHT 7.00 7.00 0.00

LIGHT 4.75 4.75 0.00

AVERAGE 5.45 5.45 0.00

HEAVY 5.10 5.10 0.00

Prizes at Ras Tanura intended for

Northwestern Europe is against ICE

Brent:

JULY JUNE CHANGE

EXTRA LIGHT 4.70 3.70 1.00

LIGHT 3.10 2.10 1.00

AVERAGE 2.30 1.30 1.00

HEAVY -0.10 -1.10 1.00

Prices at Ras Tanura for Saudi oil

intended for the Mediterranean Sea have been established

against ICE Brent:

JUNE JUNE CHANGE

EXTRA LIGHT 4.70 3.70 1.00

LIGHT 3.00 2.00 1.00

AVERAGE 2.40 1.40 1.00

HEAVY -0.30 -1.30 1.00

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