Saudi Arabia, the world’s top oil exporter, is likely to increase the official selling price (OSP) for its flagship Arab Light crude to Asia for the first time in three months in September. This potential increase is expected to be between 50 to 80 cents a barrel, tracking a rise in the Middle East benchmark Dubai.
The price spread between the first and third month cash Dubai has widened by approximately 80 cents a barrel, driven by a rise in spot demand for Middle East crude as U.S. and European supplies have become more expensive for Asian buyers. Notably, PetroChina purchased 13 cargoes last month, tightening the medium-sour crude supply.
However, the slow recovery of refining margins in Asia and weak demand for refined products in China could limit the extent of Saudi price hikes. In June, complex refinery margins in Singapore averaged $3.69 a barrel, up from $2.94 in May, but still lower than April.
Saudi Aramco typically releases its crude prices around the fifth of each month, influencing the pricing strategies of other Middle Eastern producers, including Iran, Kuwait, and Iraq.