Saudi Arabia may reduce its oil prices for July exports to Asia. This move comes as OPEC+ continues to boost production. A Saudi Arabia oil price cut would mark the lowest prices in six months.
To begin with, energy traders expect Saudi Aramco to lower the official selling price (OSP) for Arab Light crude. The likely cut ranges between 40 and 50 cents per barrel. This would place the OSP about $0.90 to $1.00 above the Oman/Dubai average.
Consequently, crude buyers in Asia watch these changes closely. They use Saudi OSPs to benchmark prices from other Gulf producers. Iran, Iraq, and Kuwait often follow Saudi pricing trends.
In addition, Saudi Arabia oil price OPEC+ plans to raise output by 411,000 barrels per day in July. This follows earlier increases across April, May, and June. More oil in the market puts pressure on prices.
Moreover, Dubai crude premiums fell by 45 cents compared to April. This decline shows weaker demand and rising supply. The market feels the effect of global uncertainty and slow growth.
Furthermore, Saudi Arabia oil price cut talks reflect these challenges. The drop in demand and rising supply force exporters to stay competitive. Aramco listens to buyers and adjusts its pricing strategy monthly.
Typically, the company bases its OSPs on customer feedback and changing market values. However, Aramco usually does not comment on its pricing methods publicly. Traders expect the new prices around the fifth of each month.
Notably, a Saudi Arabia oil price cut could impact more than 9 million barrels per day of exports. These barrels go mainly to Asia. So any pricing change affects many regional contracts.
As a result, this move would also pressure other producers in the region to match prices. A cut could help Saudi Arabia stay competitive amid a flood of new oil. Saudi Arabia may cut oil prices for Asia in July. OPEC+ is making more oil, so prices are dropping. This cut may affect other countries too.
