Saudis may hike key oil price to record as Russian supplies drop
The world’s largest oil exporter will likely boost pricing of its main crude variety to a record, even as China struggles with a coronavirus outbreak, signalling a bullish outlook despite the risk to demand.
Saudi Aramco may raise the official selling price of its key Arab Light crude by $5 a barrel to Asian customers for May-loading cargoes, according to the median estimate in a Bloomberg survey of five refiners and traders. That would increase the differential to $9.95 above the Oman-Dubai benchmark, which would be the widest since Bloomberg began compiling the data in 2000.
The state-run company didn’t respond to an e-mail seeking comment. Aramco typically releases official prices in the first five days of the month.
Oil soared to the highest since 2008 this quarter as the war in Ukraine helped to lift prices that had already been boosted by expanding global demand and fast-falling stockpiles.
The expected hike in pricing for the key Middle Eastern barrels — which help set the tone for other grades from the region — is likely to come despite the tightened lockdowns in the world’s top crude importer.
Official selling prices, or OSPs, are the premiums or discounts to regional benchmarks for barrels, and they determine how much users pay for cargoes. The differentials can indicate the strength or weakness of underlying demand.
As Saudi Aramco prepares to announce selling prices, Riyadh is set to join other producers including Russia at an OPEC+ meeting. Ahead of the gathering on Thursday, members have signalled they still see no need to adapt supply plans even as the war in Ukraine delivers the biggest disruption in decades.
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