The world’s largest crude oil exporter, Saudi Arabia, raised its official selling prices for its flagship crude to the Asian market in May to a fresh record against regional benchmarks, in a move widely expected by traders and refiners.
The Saudis hiked the OSP for May for Asia for Arab Light—the Kingdom’s flagship grade—to a record premium of $9.35 per barrel above the Oman/Dubai benchmark, off which Middle Eastern crude is priced in Asia.
The price for May is raised by a massive $4.40 a barrel over the April OSP for Arab Light of $4.95 a barrel premium over Oman/Dubai, per Bloomberg’s estimates.
Last week, a Bloomberg survey showed that Asian refiners and traders expected 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.
For May, Saudi Arabia’s oil giant Aramco hiked the prices of all its crude going to all markets.
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 to another all-time high over the Oman/Dubai benchmark.
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.
Last week, the OPEC+ meeting concluded that no change in production plans was needed, and agreed to lift the group’s production by another 432,000 barrels per day starting in May.
The 32,000 bpd above the originally agreed to 400,000 bpd is due to shifting baselines of five of its members.
Saudi Arabia’s production quota has been lifted to 10.549 million bpd, and Russia’s quota was raised to the same amount.
Oilprice