- Saudi Arabia raised its OSPs for its September shipments to Asia to new highs.
- Arab Light to the Far East is now set at $9.80 above the Oman/Dubai benchmark.
- Saudi Arabia also increased the price of crude oil bound for the United States, northwestern Europe and the Mediterranean.
OPEC’s most prolific oil producer and exporter, Saudi Arabia, has raised the official selling price of its crude to new highs for its September shipments.
Saudi Arabia raised the price of all its crudes for September to its prized market, Asia. Saudi Arabia increased the price of Arab Light to the Far East by $0.50 a barrel in September to $9.80 versus the Oman/Dubai benchmark.
OPEC’s largest producer, Saudi Arabia, typically adjusts the selling price of its crude oil a day after its monthly OPEC+ meeting. On Wednesday, the group met to discuss production plans for September, and finally decided to increase the September quota by 100,000 barrels per day, of which 26,000 barrels per day to Saudi Arabia.
Saudi Arabia also increased the price of crude oil bound for the United States, northwestern Europe and the Mediterranean. Other OPEC producers often adjust their prices as well, following Saudi’s price action. It is also largely seen as a measure of how Saudi Arabia sees future demand for oil.
The price adjustment provides a more complete picture of the direction the market could take. Yesterday, OPEC increased its production quota, indicating that there was a need for production in excess of the August target (which was already 648,000 bpd from July – a move typically indicating that the group sees increased reliance on OPEC oil. But today, Saudi Arabia sends a slightly different message to the market: it wants to cool demand for its exports by raising prices. This is typically a signal to the market that the Kingdom sees no need for additional production.
Saudi Arabia has made some downward adjustments with its Extra Light qualities to Northwest Europe and the Mediterranean.
By Julianne Geiger for Oilprice.com
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