Saudi Arabia, the leading oil exporter, has increased the price of its flagship Arab Light crude for Asia in September for the first time in three months. The official selling price has risen by 20 cents to $2 a barrel above the Oman/Dubai average, marking a two-month high, although this increase was less than anticipated by the market.
In addition to the Arab Light price hike, Saudi Aramco raised prices for other light grades sold to Asia but kept the prices for Arab Medium and Arab Heavy crude unchanged. Refining sources had expected a minimum increase of 50 cents per barrel for all crude grades due to rising Middle East benchmark prices.
The smaller-than-expected price hikes are attributed to weak refining margins in Asia, as negotiations for annual term supplies are approaching. In contrast, Saudi Arabia has cut prices for other regions, with significant reductions of $2.75 per barrel across all crude grades for Northwest Europe and the Mediterranean.
OPEC+ ministers recently held a meeting where they decided to maintain the current output policy, including plans to start unwinding one layer of output cuts from October. The group is currently reducing output by a total of 5.86 million barrels per day, approximately 5.7% of global demand, to stabilize the market amid uncertainties regarding global demand and rising supply from non-OPEC sources.