Saudis Lift Some Oil Prices to Asia With Supply Cuts Prolonged - Bloomberg

Saudis Lift Some Oil Prices to Asia With Supply Cuts Prolonged - Bloomberg

Saudi Arabia lifted the pricing of its flagship crude to Asia after the key OPEC+ producer pledged this week to extend its output cuts for another month.

State-owned Saudi Aramco set the official selling price of its flagship Arab Light crude at a premium of plus $3.20 a barrel for August, according to a price list seen by Bloomberg. Almost all of the traders and refiners surveyed by Bloomberg prior to the kingdom’s announcement that it would extend supply curbs had predicted no price change.

The kingdom also lifted prices for its Arab Medium and Arab Heavy crudes to the region, while cutting those for its Super Light barrels.

Saudi Arabia’s effort to prop up the oil market will be assisted by OPEC+ ally Russia, which also pledged a reduction in exports for August, though the announcements have had a muted impact on benchmark futures. Asian buyers may look elsewhere for alternative supplies if the curbs deprive them of barrels, or if Middle Eastern cargoes are deemed expensive.

For July, Aramco hiked the prices for all of its grades to Asia after announcing a surprise production cut for the month.

Saudi Arabia will prolong into August its previously announced unilateral production cut of 1 million barrels a day. Russia will reduce exports by 500,000 barrels a day.

Aramco sells about 60% of its crude to Asia, with its biggest buyers in China, Japan, South Korea and India. The exported cargoes are mostly under long-term contracts and pricing for these barrels are reviewed each month.