Saudi Arabia is set to reduce its July crude oil prices for Asia to a six-month low, mirroring declines in benchmark prices due to an uptick in supply from OPEC+.
The anticipated drop for Arab Light crude could range from $0.40–0.50, setting the price at $0.90–$1 per barrel (bbl) lower than the previous month, according to a Reuters survey of four Asian refining sources.
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This potential reduction would mark the lowest price point for Arab Light crude since January, as indicated by Reuters data.
Saudi crude official selling prices (OSPs) are typically announced around the fifth of each month and influence pricing for Iranian, Kuwaiti and Iraqi oil, affecting around nine million barrels per day (bpd) destined for Asia.
The survey also suggests that July OSPs for other Saudi grades such as Arab Extra Light, Arab Medium and Arab Heavy crude are expected to fall by $0.30-0.45/bbl from June.
The decline in oil prices follows OPEC+, which includes the Organisation of the Petroleum Exporting Countries and allies such as Russia, agreeing to boost production by nearly one million barrels per day (1mbbl/d) across April, May and June.
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By GlobalDataIn an upcoming meeting, eight OPEC+ countries may consider a further output increase of 411,000bpd for July, as per sources.
These supply hikes come amid global economic challenges including a tariff war initiated by the US.
Middle Eastern benchmarks have been pressured by the rising supplies, with the average cash Dubai premium to swaps at $1.21/bbl as of 27 May, a $0.45 decrease from April’s average.
Saudi Aramco, the state oil company, bases its crude prices on customer recommendations and the past month’s oil value changes, considering yields and product prices.
