Saudi Aramco announced the official prices for the sale of shipments of Arab Light crude during the coming month of August (2023), to its customers in Asia, Europe and the United States.
The company decided to raise the official sale price of Saudi Arabian Light crude oil to its customers in Asia by 20 US cents to $3.2 per barrel above the Oman/Dubai average, according to the pricing document seen by the specialized energy platform.
Saudi Aramco’s decision to raise the selling prices of Arab crude came after the kingdom’s pledge (the world’s largest oil exporter) to extend production cuts by one million barrels per day for another month to August, provided that this could be extended, to face macroeconomic headwinds that caused stagnation in the markets. .
The decision to raise prices contradicts the expectations of a number of analysts to reduce prices in light of the oil prices continuing to trade in the range (70: 75 dollars per barrel) during the recent period.
Reducing Saudi oil production
On Monday, July 3, Saudi Arabia announced the extension of the voluntary production cut of one million barrels per day, which began to be implemented in July, to August, with the possibility of extending it again.
According to Saudi Arabia’s pledge to voluntary reduction, the Kingdom’s oil production in August 2023 is scheduled to reach approximately 9 million barrels per day, according to data from the specialized energy platform.
The reduction of one million barrels per day is scheduled to be added to the voluntary cut previously announced by Saudi Arabia in April 2023, which extends until the end of December 2024.
The additional voluntary cut comes, according to the Saudi Ministry of Energy, to enhance the precautionary efforts made by OPEC + countries with the aim of supporting the stability and balance of oil markets.
Saudi oil selling prices
The new increase in the price of a barrel of Saudi oil by Aramco is the second in a row, after its rise in July by about 45 cents, following its decline in June, after 3 consecutive increases in Arab crude prices, in March and April. April and May.
The selling prices of Saudi Aramco shipments to Asia fell to their lowest levels in 15 months, last February, after recording their first decline during (2023) last January, according to the figures monitored by the specialized energy platform.
The official selling price for the month of July for Arab Light crude (the main grade for Saudi exports) reached the highest level in 6 months at $ 3 a barrel, higher than the average prices of Dubai and the Sultanate of Oman.
Saudi Aramco’s decision to raise prices came after an analysis and study of the market in light of the new data regarding the extension of the oil cut, and the Kingdom receiving signals related to the scarcity of oil supply, especially in Asia, after Russia announced a reduction in its exports by 500,000 barrels per day in August.
Oil prices ended their dealings last month with gains, but they achieved quarterly losses, as Brent crude rose by 3.2% in June, but recorded losses of about 5.7% during the second quarter of 2023, and West Texas Intermediate crude achieved monthly gains by 3.8%, but it recorded a quarterly loss of 6.7%.
The increases announced by Saudi Aramco contradicted expectations and opinion polls of traders, with a decrease of $0.50 a barrel for next August shipments to $2.5 a barrel above Dubai/Oman prices, according to Reuters.
During this July, Aramco refuted expectations of the impact of the Saudi cut – amounting to one million barrels per day – on oil supplies to some customers in Asia, confirming full quotas for all customers.
It is noteworthy that Saudi Aramco sells up to 60% of shipments of Arab Light Crude to its customers in Asia, led by China, Japan, Korea and India. Most of these shipments are sold under long-term contracts, so the company reviews its prices monthly to determine the selling prices. new.
The official selling prices for Saudi crude are usually released on the fifth of each month, and set the trend for Iranian, Kuwaiti and Iraqi prices. This affects the 9 million barrels per day of crude destined for Asia.
Leave a Reply