Saudi Aramco hikes August crude OSPs for all destinations

Saudi Aramco had raised its official selling prices for crude loading in August for all destinations, the Saudi Arabian energy group said July 6.

The price hike comes after the abrupt cancellation of OPEC+ talks which raised the prospect of a rollover of the group's July quotas into August, keeping supply tight in a market thirsty for oil.

For Asia-bound crude, August differentials against Dubai/Oman for Saudi Light, Medium and Heavy were all raised by 80 cents/b versus July levels, while Super Light was raised by $1/b.

The cash Dubai premium over same-month Dubai futures spread -- understood to be a key element in OSP calculations -- averaged $1.88/b in June, up from an average of $1.14/b in May, according to S&P Global Platts data.

August OSPs for Northwest Europe were raised 80 cents/b for all grades.

For crude destined for Mediterranean, OSPs were raised 60 cents/b for Light crude and 70 cents/b for Heavy.

For US-bound crude, Saudi Light, Medium and Heavy were all raised 20 cents/b on the month.

Market participants and analysts had expected OSPs to be raised -- in particular for lighter grades in line with strengthening product cracks -- but few anticipated the rift within OPEC and the risk of tighter supply as a result. OPEC+ talks broke down mainly due to differences between Saudi Arabia and the UAE over production increases and the production baseline used to calculate quotas.

"The rising possibility of no deal to extend the OPEC+ agreement beyond April 2022, and August quotas thus remaining flat, highlight a clearly bullish short-term scenario amid the summer demand surge," Platts Analytics said in a note.