Saudi Arabia, the world’s leading crude oil exporter, may cut its October crude oil prices for Asia due to declining refining margins in China and across Asia, along with weaker Dubai benchmark prices. This forecast comes from a Reuters survey of refining industry sources.
The survey indicates that Saudi Aramco is expected to reduce the official selling price (OSP) for all its crude grades destined for Asia next month. According to the survey, the flagship Arab Light grade might see a price drop of $0.50 to $0.70 per barrel compared to September. If the price drops by $0.70, it would cost Asian refiners $2.00 per barrel above the Oman/Dubai average, which serves as the pricing benchmark for Middle Eastern crude exports to Asia.
The anticipated decrease in Arab Light prices, along with those of heavier grades, is expected to follow the trend of weaker Dubai prices observed in August. However, some refiners believe that Saudi crude prices could remain steady or change only slightly due to recent strength in Dubai prices during the last week of August.
Saudi Arabia typically announces its OSPs for the following month around the fifth day of each month and does not provide commentary on pricing decisions.
In addition to Dubai benchmark trends, weak refining margins in Asia, particularly in China, could also influence Saudi Arabia’s pricing for October. Refiners generally expect modest reductions in Saudi crude prices, though all are anticipated to be lower than September’s rates.
Last month, Saudi Aramco increased the price of its light crude for Asian clients for the first time in three months. For October, global oil supply from Saudi Arabia and the Middle East could be substantial, as OPEC+ hints at potentially easing some of its production cuts.