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Saudi Arabia May Raise Its Oil Prices For A Fifth Consecutive Month

Saudi Arabia may raise the official selling price of its flagship Arab Light blend for Asian buyers for the fifth month in a row, Reuters has reported, citing strong demand for the commodity.

The news outlet polled five respondents who said Riyadh could raise the price of the medium sour crude for November delivery by some $0.45 per barrel.

Last month, Saudi Arabia raised the official selling price for Arab Light for Asia by $0.10 cents per barrel to $3.60 a barrel over the Oman/Dubai average, the Middle Eastern benchmark, off which grades going to Asia are being priced.

The price increase was much smaller than an expected hike of $0.45 per barrel in a Reuters survey of five refining sources.

Meanwhile, speculation continues about whether the Saudis might decide to unwind their production cuts at the next OPEC+ meeting, scheduled for Wednesday.

“We do not believe that the group will change its output policy,” ING said in a note, referring to the common OPEC+ policy on production.

“However, what is possible (and a JMMC meeting is not needed for this), is Saudi Arabia starting to ease its additional voluntary supply cut of 1MMbbls/d.”

The prediction echoes one made last week by Rapidan Energy Group’s president Bob McNally.

“They do not want to deliberately over-tighten the market, because if you get a spike, then you get a demand collapse, and you get a bust,” McNally told Bloomberg Television in an interview.

Not everyone agrees, however.

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"There is no sign that Saudi will revise its output cut decision at this moment. So we expect no change on their determination of defending oil prices," one of the Reuters sources for the poll said.

Indeed, it would be a risky move for Saudi Arabia to start ramping up production right now: prices will immediately slump, which would render the cuts until now pretty much pointless.

By Charles Kennedy for Oilprice.com

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  • Milton on October 03 2023 said:
    Saudi Arabia is doing the right thing by raising the price of oil. , because the people of this world are taking oil , gas and coal for granted. They have been sold on the piece of false narrative. That solar energy, wind turbines can provide what oil and gas can do, which is nonsense , the equipment that is used to produce food ,the vehicles we drive to and from work ,the clothes we wear, the medical equipment that keeps us alive., all comes and manufactured with a byproducts of oil. therefore, I praise Saudi Arabia for increasing the price of oil , get everyone’s attention that we can’t live without it.

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