Saudi Arabia has cut its official selling prices (OSPs) for crude oil to Asia in July for a second month, as expected, as spot premiums eased on slow demand despite supply disruptions tied to the U.S.-Israeli war with Iran.
The July OSP for flagship Arab Light crude has been set at a premium of $9.50 a barrel above the average Dubai and Oman quotes, a pricing document by Saudi Aramco showed on Monday, $6 a barrel lower than the OSP for June.
July OSPs for other Saudi grades to Asia also fell by $6 per barrel from the previous month.
The price cut came in line with market expectation following a price decline and tepid trading in the spot market in May.
The cash Dubai price’s premium to swaps averaged $9.59 a barrel last month, down from April’s average of $13.92, Reuters data showed, with spot Oman premiums showing a similar trend.
Refiners in China, the world’s No. 1 oil importer, have cut runs and drawn on inventories due to mounting refining losses, which has led to a sharp decline in the country’s imports. They lifted less Saudi crude in May and June.
Still, July OSPs to Asia remain much higher than before the Iran war as the conflict has largely halted energy flows through the key Strait of Hormuz.
Meanwhile, Aramco also lowered July OSPs to other regions in the world, according to the document.
Term crude supplies to Asia are priced as a differential to the Oman/Dubai average:
JULY JUNE CHANG
E SUPER 11.15 17.15 -6 LIGHT EXTRA 10 16 -6 LIGHT LIGHT 9.5 15.5 -6 MEDIU 7.75 13.75 -6 M HEAVY 6.4 12.4 -6
Prices at Ras Tanura destined for United States are set against ASCI:
JULY JUNE CHANG
E EXTRA 13.95 15.95 -2 LIGHT LIGHT 12.6 14.6 -2 MEDIU 11.4 13.4 -2 M HEAVY 10.65 12.65 -2
Prices at Ras Tanura destined for Northwest Europe are set against ICE Brent:
JULY JUNE CHANG
E EXTRA 17.45 27.45 -10 LIGHT LIGHT 15.85 25.85 -10 MEDIU 15.05 25.05 -10 M HEAVY 12.65 22.65 -10
Prices at Ras Tanura for Saudi oil destined for the Mediterranean are set against ICE Brent:
JULY JUNE CHANG
E EXTRA 17.35 27.35 -10 LIGHT LIGHT 15.65 25.65 -10 MEDIU 15.05 25.05 -10 M HEAVY 12.35 22.35 -10
(Reporting by Siyi Liu and Noel John; Editing by Christopher Cushing, Sonali Paul and Sherry Jacob-Phillips)