Saudi Arabia cuts May oil prices to Asia to four-month low ahead of OPEC+ supply boost

Saudi Arabia has lowered its oil prices for May shipments to Asia, reaching a four-month low, as the OPEC+ coalition gears up for a supply increase.Saudi Arabia, acknowledged as the preeminent oil exporter worldwide, declared on Sunday a notable decrease in crude oil prices for Asian purchasers for May, representing the lowest levels observed in four months. This decision follows an unexpected action by the OPEC+ oil coalition to expedite the rise in oil production levels.

May Arab The prices of light crude oil in Asia have seen a notable reduction, falling by $2.30 per barrel, which represents the most substantial drop in over two years. Other grades have witnessed a reduction of $2.30 per barrel. In May, crude oil prices intended for the U.S. and Europe saw reductions of 20 and 50 cents per barrel, respectively. OPEC+ has declared a forthcoming augmentation in oil production, which is projected to escalate by 411,000 barrels per day commencing in May.

Saudi Aramco, the national oil enterprise, has declared a decrease in the official selling price (OSP) for its premier Arab Light crude for the month of May. The price has been reduced by $2.30, now positioned at $1.20 per barrel above the average prices of Oman and Dubai, as indicated in a pricing document issued by the producer.The recent downturn signifies the most substantial decrease in more than two years, indicating the second successive month in which Aramco has lowered its prices, as per Reuters’ documentation of Saudi Official Selling Prices (OSPs). The firm has declared a price reduction for additional grades sold to Asia in May, lowering them by $2.30 per barrel.

In an unexpected development, eight OPEC+ countries declared on Thursday their intention to accelerate the schedule for reducing oil production cuts. The consortium plans to boost output by 411,000 barrels per day in May, a number that significantly exceeds analysts’ expectations, representing roughly 0.4% of the worldwide oil supply. Recent developments, alongside an escalating global trade conflict, have led to a notable decrease in oil prices, which plummeted nearly 11% in the week concluding April 4, hitting levels not observed in more than three years.

Prior to the latest OPEC+ announcement, analysts surveyed by Reuters had projected a decrease in Arab Light pricing for Asia ranging from $1.80 to $2, in light of the substantial declines in benchmark prices noted in March.In March, the spot premium for Dubai crude averaged $1.38 per barrel, reflecting a significant decline from the February average of $3.33 per barrel. The observed decline is primarily linked to a resurgence of Russian supply entering the Asian market, a development that comes in the wake of the disruptions faced in January and February as a result of U.S. sanctions on Russian energy trade.

Mark Cooper

Mark Cooper is Political / Stock Market Correspondent. He has been covering Global Stock Markets for more than 6 years.