Saudi Arabia on Tuesday raised again the price of its oil going to Asia in August to close to record differentials, in a widely expected move that tracks strong refining margins and expectations of robust demand.
Saudi Aramco announced on Tuesday that it was lifting its official selling prices (OSP) to all regions except the United States, where no change in differentials was made.
The price of Saudi Arabia’s flagship Arab Light crude grade to Asia in August was raised by $2.80 a barrel to $9.30 per barrel over the Dubai/Oman benchmark, off which the Middle Eastern crude to Asia is priced. That was in line with a Bloomberg survey of refiners and traders from last week, and slightly above the average $2.40 per barrel increase expected by traders and refiners in a Reuters poll.
The August price of Arab Light of $9.30 over Dubai/Oman is just five cents away from the record high differential of $9.35 a barrel premium over Oman/Dubai from earlier this year.
The Saudis also lifted the prices of all other grades for Asia in August, with Extra Light at a record premium. Aramco announced smaller increases in the prices of Extra Light, Arab Light, and Medium to both the Mediterranean region and northwest Europe. All prices for the U.S. market remain the same as last month’s, according to Aramco’s pricing table shared by Amena Bakr, Chief Opec Correspondent & Deputy Bureau Chief at Energy Intelligence. Related: New ESG Rules Are Hurting American Farmers
Saudi Arabia, which sets the pricing trend for most Middle Eastern oil exporters, typically announces its prices around the fifth of each month, and as a policy, it doesn’t comment on the price movements.
The market viewed the price increase as a sign that the world’s top crude oil exporter expects robust demand this summer despite growing fears of a recession that could sink demand.
By Tsvetana Paraskova for Oilprice.com
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