According to Reuters article published on April 5, 2023, Saudi Arabia, the world's top oil exporter, has raised the prices of its flagship crude for Asian buyers for the third straight month.
The official selling price (OSP) for May-loading Arab Light to Asia was raised by 30 cents a barrel from April to $2.80 a barrel over Oman/Dubai quotes.
The price increase is in line with a Reuters survey of sources from Asian refiners and follows a production cut from the Organization of the Petroleum Exporting Countries and their allies (OPEC+) which is expected to tighten the supply from the Middle East.
The OPEC+ group caught the market off guard on Sunday by announcing a 1.16 million barrels per day (bpd) cut from May to the rest of the year.
Saudi Arabia also raised the OSPs for Arab Medium and Arab Heavy, crude grades that contain more sulphur than Arab Light, by 30 cents and 50 cents in May respectively.
The size of the price increase on Arab Heavy follows a stronger demand for heavier crude in the region as new refineries designed to process heavy grade, such as PetroChina's Jieyang plant, are coming online.
"Higher OSPs would undoubtedly eat refiners' margins. But the key question is if and when Saudi's output cut is to have impact on supply to its term buyers," said a Singapore-based trader.
The market participants had expected that the OPEC+ production cut could prompt Asian refiners to seek more supply from Russia, Africa and the Americas.
For other regions, the top oil exporter set its Arab Light OSP to northwest Europe at $1 a barrel above ICE Brent for May, unchanged from April.
Meanwhile, the OSP to the United States was raised by 10 cents from last month at $6.75 versus ASCI for May.
