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Saudi Aramco raises July OSPs for Asia, Europe while holding US prices

Highlights

OSPs to US unchanged for 2nd month

Prices were expected to rise about $1.50/b

Lighter grades rise most

Saudi Aramco raised all of its official selling prices across Asia, Europe and the Mediterranean for July-loading cargoes and kept US differentials unchanged, with Asia-bound barrels seeing the largest increases of between $1.80/b and $2.75/b, according to a pricing document released June 5.

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For Asia-bound crude, Aramco increased Arab Super Light by $2.75/b to an $8.50/b premium over the Oman/Dubai average, while Arab Extra Light was up by $2.50 to a premium of $7.15/b. Arab Light was raised by $2.10/b to a $6.50 premium over the Oman/Dubai average, while Medium and Heavy were up by $1.80/b to premiums of $6.15/b and $4.80/b respectively.

Saudi Aramco, the Middle East's largest oil producer, was expected to raise its July OSPS by around $1.50/b after lowering them for June, mirroring the rise in the benchmark Platts Dubai sour crude complex in May, sources told S&P Global Commodity Insights. Lighter grades saw the biggest price increases, as expected.

The Dubai cash/futures spread -- understood to be a key element in OSP calculations -- averaged $5.17/b in May, up from an average of $3.65/b in April, S&P Global data showed.

The Middle East sour crude complex advanced in May on the back of healthy demand cues from Asian refiners looking to buy more oil as margins continued to rise, traders said.

Aramco's increase in OSPs also comes after OPEC+ ministers agreed to a nearly 50% increase in July production quotas to 648,000 b/d and another 648,000 b/d for August. The July and August increments are above the typical 432,000 b/d monthly raises that OPEC+ has implemented in recent months.

For Northwest Europe-bound crude, Aramco increased Arab Light by $2.20/b to a $4.30/b premium to ICE Brent and Extra Light by $1.20/b to a $6.80/b premium.

Medium was raised by $1.40/b to plus $1.30 over ICE Brent, while Heavy was increased by $1.50/b to a discount of $2.60/b.

Mediterranean-bound differentials also increased, with Arab Extra Light rising by $1.20/b at a $6.80/b premium to ICE Brent. Arab Light was up by $2.00/b to a $3.90/b premium to ICE Brent. Medium rose $1.20/b to a premium of $1.40/b to the benchmark. Arab heavy was up by 20 cents/b to a discount of $2.80/b to ICE Brent.

For US-bound crudes, Aramco maintained pricing for all grades for a second consecutive month. The Extra Light OSP was set at a $7.00/b premium over ASCI. Arab Light, Medium, and Heavy grades were kept at premiums of $5.65/b, $4.95/b, and $4.50/b, respectively.

Grade
May
June
July
Change
To Asia (Oman/Dubai basis)
Super Light
10.85
5.75
8.50
2.75
Extra Light
9.60
4.65
7.15
2.50
Arab Light
9.35
4.40
6.50
2.10
Arab Medium
9.30
4.35
6.15
1.80
Arab Heavy
7.95
3.00
4.80
1.80
To Northwest Europe (ICE Brent basis)
Extra Light
8.10
5.60
6.80
1.20
Arab Light
4.60
2.10
4.30
2.20
Arab Medium
1.90
-0.10
1.30
1.40
Arab Heavy
-1.10
-4.10
-2.60
1.50
To Mediterranean (ICE Brent basis)
Extra Light
5.60
5.60
6.80
1.20
Arab Light
4.90
1.90
3.90
2.00
Arab Medium
2.20
0.20
1.40
1.20
Arab Heavy
0.00
-3.00
-2.80
0.20
To US (ASCI basis)
Extra Light
7.00
7.00
7.00
0.00
Arab Light
5.65
5.65
5.65
0.00
Arab Medium
4.95
4.95
4.95
0.00
Arab Heavy
4.50
4.50
4.50
0.00
Source: Saudi Aramco