Saudi Arabia May Raise Its Oil Prices For Asia To Record Premiums

Oilprice.com ^ | 3-20-2022 | Tsvetana Paraskova

[blam]

Asian refiners and traders expect top crude exporter Saudi Arabia to once again hike significantly the prices of its crude going to Asia in May to a record premium over the Middle Eastern benchmarks, a Bloomberg survey showed on Tuesday.

The soaring oil prices and the “buyers’ strike” over purchasing Russian crude could be an opportunity for Russia’s key ally in the OPEC+ pact, OPEC’s de facto leader Saudi Arabia, to hike its official selling prices (OSPs) to another all-time high over the Oman/Dubai benchmark, off which Middle Eastern crude is priced in Asia.

Per the Bloomberg survey of five traders and refiners, Saudi Arabia’s oil giant Aramco could increase its OSP for May for Asia for Arab Light—the Kingdom’s flagship grade—by a massive $5 per barrel to a premium of nearly $10 a barrel over the Oman/Dubai benchmark.

Earlier in March, Saudi Aramco lifted its April price to Asia for its flagship grade to $4.95 a barrel premium over Oman/Dubai, which was the largest ever premium of Arab Light to the Middle East benchmark.

If in early April Saudi Aramco raises the price of Arab Light for May by as much as traders and refiners in the Bloomberg poll expect, Arab Light will be sold in Asia in May at a premium of $9.95 per barrel over the Oman-Dubai benchmark. This would be a new record differential for the Saudi crude prices to Asia.

Saudi Arabia generally sets the pricing trends of the other major Middle Eastern oil producers, and it usually sets the OSPs of its crude for the following month around the fifth of each month, typically after the monthly OPEC+ meeting.

The meeting of the OPEC+ group is scheduled for March 31, and producers have signaled they would keep the production plan as-is,

(snip)

[Sacajaweau]

We are soooooo sc*****.

[jdsteel]

The Saudi’s want to charge a premium right at the same time Russia’s offering a discount. And Russia is part of OPEC+.

Curious.

[hardspunned]

Yeah, but all that Russian oil will go to China at market minus what percentage Putin and Xi negotiate. I know two people who will eventually feel the pinch from additional petrodollar/rubles going into Saudi pockets, you and me, hemorrhaging, at the gas pump.

[agere_contra]

It is very curious. And the Sauds just halted military operations in Yemen today.

[agere_contra]

It cerrtainly shows a disalignment between Biden and the House of Saud.

A lowered price would have put pressure on Russia. A raised price looks like a signal to go buy stuff from Russia.

It may be that the rumours about field depletion are true, and Saudi - having been baulked in Yemen - expects to be cutting back on oil production from now on. If so, they may as well try to get a good price for what they have left.

[SunkenCiv]

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