Saudi Arabia cuts May oil prices to Asia to four-month low
The drop marks the biggest decline in more than two years and is the second consecutive month Aramco has lowered its prices
Saudi Arabia, the world’s top oil exporter, on Sunday slashed crude oil prices for Asian buyers in May to their lowest in four months, following a recent shock decision by the OPEC+ oil group to speed up oil output hikes.
State oil company Saudi Aramco cut the May official selling price (OSP) for flagship Arab Light crude by $2.30 to $1.20 a barrel above the average of Oman and Dubai prices, a pricing document from the producer showed.
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The drop marks the biggest decline in more than two years and is the second consecutive month Aramco has lowered its prices, Reuters record of Saudi OSPs showed.
The company also lowered May prices for other grades it sells to Asia by $2.30 per barrel.
Decision of OPEC+ countries
Eight OPEC+ countries in a surprise decision agreed on Thursday to advance their plan to phase out oil output cuts by increasing output by 411,000 barrels per day in May, triple the expected increase, representing around 0.4 per cent of global supply.
The news, together with an escalating global trade war, sent oil prices plunging nearly 11 per cent in the week ending April 4, hitting more than three-year lows.
Prior to the latest decision by OPEC+, analysts surveyed by Reuters had expected Arab Light for Asia to be cut by $1.80 to $2, tracking the steep declines in benchmark prices in March.
The spot premium of Dubai averaged $1.38 per barrel in March, down from $3.33 per barrel, the average in February. The drops were also due to more Russian supply returning to Asia, following disruptions in January and February caused by US sanctions on Russian energy trade.
The tables below show the full free-on-board (FOB) prices for May in US dollars.
| Saudi term crude supplies to Asia are priced as a differential to the Oman/Dubai average: | |||
| May | APRIL | CHANGE | |
| SUPER LIGHT | 1.75 | 4.05 | -2.30 |
| EXTRA LIGHT | 1.00 | 3.30 | -2.30 |
| LIGHT | 1.20 | 3.50 | -2.30 |
| MEDIUM | 0.65 | 2.95 | -2.30 |
| HEAVY | -0.50 | 1.80 | -2.30 |
| Prices at Ras Tanura destined for United States are set against ASCI: | |||
| May | APRIL | CHANGE | |
| EXTRA LIGHT | 5.85 | 6.05 | -0.20 |
| LIGHT | 3.60 | 3.80 | -0.20 |
| MEDIUM | 3.70 | 3.90 | -0.20 |
| HEAVY | 3.25 | 3.45 | -0.20 |
| Prices at Ras Tanura destined for Northwest Europe are set against ICE Brent: | |||
| May | APRIL | CHANGE | |
| EXTRA LIGHT | 4.15 | 4.65 | -0.50 |
| LIGHT | 2.55 | 3.05 | -0.50 |
| MEDIUM | 1.75 | 2.25 | -0.50 |
| HEAVY | -0.65 | -0.15 | -0.50 |
| Prices at Ras Tanura for Saudi oil destined for the Mediterranean are set against ICE Brent: | |||
| May | APRIL | CHANGE | |
| EXTRA LIGHT | 4.05 | 4.55 | -0.50 |
| LIGHT | 2.35 | 2.85 | -0.50 |
| MEDIUM | 1.75 | 2.25 | -0.50 |
| HEAVY | -0.95 | -0.45 | -0.50 |
