Saudi Arabia: reduction in the price of Arabian light crude oil

Saudi Arabia plans to cut the price of its Arabian light crude oil to Asia in June despite a further OPEC+ production cut. This decision is in response to falling fuel prices and growing demand for cheap Russian crude oil in China and India.

Share:

In a surprise move, Saudi Arabia, the world’s largest oil exporter, may cut the price of its Arabian light crude oil to Asia in June. This decision was made despite a further reduction in production of OPEC+ and a recent increase in Middle Eastern crude oil prices due to supply problems in Asia. Saudi Aramcothe state-owned oil giant, may reduce the official selling price of its medium and sour crude by about 40 cents per barrel in June, after three months of price increases.

Middle East crude oil commercial contracts in Asia slow down

According to five people interviewed by Reuters, the move is a response to falling fuel prices and growing demand for cheap Russian crude oil in China and India. The refining margin for a typical Asian refiner, which processes Middle Eastern crude oil, hit a six-month low of $2.35 a barrel last Friday, and diesel margins fell 27% this month, while gasoline margins fell 49%.

As a result, the flow of commercial contracts for Middle Eastern crude oil to Asia has slowed, and some refiners are considering production cuts while many in the region have already set maintenance schedules for June-August. If oil prices continue to rise, refineries will have to scale back operations, reduce purchases and operate with low feedstock inventories before their turnarounds, according to one respondent.

Saudi Arabia takes action on falling fuel prices

The market also expects China to issue a new batch of refined product quotas soon, adding more supply to an already saturated market. Discounted Russian crude oil has been acquired by refiners in China and India, the world’s largest and third largest oil importers, replacing demand for Middle Eastern crude oil.

Saudi crude OSPs (official selling prices) are usually published around the 5th of each month and set the trend for Iranian, Kuwaiti and Iraqi prices, affecting about 9 million barrels of crude oil destined for Asia. Saudi Aramco officials do not comment on the kingdom’s monthly PSOs as a matter of policy.

In response to falling fuel prices and growing demand for cheap Russian crude oil in China and India, Saudi Arabia, the world’s largest oil exporter, plans to cut the price of its Arabian light crude oil to Asia in June. This decision was made despite a further OPEC+ production cut and a recent increase in Middle Eastern crude oil prices due to supply problems in Asia.

  • Populaires ​
Mauritania: Sonatrach and SMH launch strategic partnership in downstream oil sector
Eos Energy secures additional $22.7mn to strengthen US production capacity
Glencore in talks with London over future of insolvent Lindsey oil refinery
EDF power solutions commissions the largest solar power plant in the Territoire de Belfort
Lithuanian nuclear operator SE Ignalina signs agreement with Newcleo
Indonesia Increases Its Energy Purchases from the United States: A Major Deal with Pertamina
Indonesia has signed a memorandum of understanding with the United States to increase its energy imports. This deal, involving Pertamina, aims to diversify the country's energy supply sources.
VAALCO focuses on Baobab field in Ivory Coast, despite limited production
VAALCO Energy continues to operate the Baobab field by renovating its floating platform, despite modest production. This strategy aims to maintain stable profitability at low cost.
Empty reservoir explodes at Lukoil-Perm facility: no casualties reported
An empty reservoir exploded at a Lukoil-Perm oil facility in Russia, causing no injuries according to initial assessments pointing to a chemical reaction with oxygen as the cause of the accident.
British Lindsey refinery resumes deliveries after rescue deal
The British Lindsey refinery has resumed fuel deliveries after reaching a temporary agreement to continue operations, while the future of this strategic site remains under insolvency proceedings.
BP and Shell sign strategic agreements to revive Libya’s oil industry
BP and Shell intensify their commitments in Libya with new agreements aimed at revitalizing major oil field production, amid persistent instability but rising output in recent months.
Ecuador: Partial Resumption of Oil Transport After Major Climatic Disruptions
The private OCP pipeline has resumed operations in Ecuador following an interruption caused by heavy rains, while the main SOTE pipeline remains shut down, continuing to impact oil exports from the South American country.
McDermott awarded major offshore contract by BRAVA Energia in Brazil
McDermott secures contract worth up to $50 million with BRAVA Energia to install subsea equipment on the Papa-Terra and Atlanta oil fields off the Brazilian coast.
Saudi Aramco Sharply Raises Crude Prices for Asia in August
Saudi Aramco increases its oil prices for Asia beyond initial expectations, reflecting strategic adjustments related to OPEC+ production and regional geopolitical uncertainties, with potential implications for Asian markets.
Liberian-Flagged Bulk Carrier Attacked in Red Sea, Israel Strikes Back in Yemen
A bulk carrier operated by a Greek company sailing under a Liberian flag suffered a coordinated attack involving small arms and explosive drones, prompting an Israeli military response against Yemen's Houthis.
Canada Awaits Private Sector Decision on Alberta-Pacific Pipeline
The Canadian government is now awaiting a concrete private-sector proposal to develop a new oil pipeline connecting Alberta to the Pacific coast, following recent legislation intended to expedite energy projects.
Petrobras Considers Strategic Sale of Polo Bahia Oil Hub
Petrobras is exploring various strategies for its Polo Bahia oil hub, including potentially selling it, as current profitability is challenged by oil prices around $65 per barrel.
Azevedo & Travassos acquires Petro-Victory to strengthen its Brazilian onshore portfolio
Brazilian producer Azevedo & Travassos will issue new shares to buy Petro-Victory and its forty-nine concessions, consolidating its onshore presence while taking on net debt of about USD39.5mn.
OPEC+ Significantly Raises Oil Quotas with Additional 548,000 Barrels
Major oil producers accelerate their return to the market, raising their August quotas more sharply than initially expected, prompting questions about future market balances.
UK’s Lindsey refinery faces shutdown within three weeks, according to Wood Mackenzie
Lindsey refinery could halt operations within three weeks due to limited crude oil reserves, according to a recent analysis by energy consultancy Wood Mackenzie, highlighting an immediate slowdown in production.
Libya reopens the Hamada-Zawiya pipeline after six-week shutdown
The flow of crude between the Hamada field and the Zawiya refinery has resumed after emergency repairs, illustrating the mounting pressure on Libya’s ageing pipeline network that threatens the stability of domestic supply.
Gabon reactivates deep offshore blocks to stem oil decline
Libreville is intensifying the promotion of deep-water blocks, still seventy-two % unexplored, to offset the two hundred thousand barrels-per-day production drop recorded last year, according to GlobalData.
Afreximbank raises to $375 mn the reserve-based credit for Oando
The African Export-Import Bank extends the Nigerian oil company’s facility, providing room to accelerate drilling and modernisation by 2029 as international lenders scale back hydrocarbon exposure.
Petronas Launches Strategic Drilling Campaign Offshore Suriname
Petronas begins a three-well exploratory drilling campaign offshore Suriname, deploying a Noble rig after securing an environmental permit and closely collaborating with state-owned company Staatsolie.
Dalinar Energy wins recommendation to acquire Citgo with $7.38bn bid
Dalinar Energy, a subsidiary of Gold Reserve, receives official recommendation from a US court to acquire PDV Holdings, the parent company of refiner Citgo Petroleum, with a $7.38bn bid, despite a higher competing offer from Vitol.
Global Oil Exploration Investments Decline, a First Since 2020
Oil companies may reduce their exploration and production budgets in 2025, driven by geopolitical tensions and financial caution, according to a new report by U.S. banking group JP Morgan.

LEGAL

FOSSILS

POLICY

RENEWABLE

PLUS

© XMARKET PUBLISHING

Welcome

Your subscription

Included in this subscription:

COMMUNICATE ON ENERGYNEWS