Saudi Arabia raised official selling prices for all its oil sales to Asian customers in May after the kingdom led a surprise OPEC+ production cut.
State-owned Saudi Aramco raised the selling price of its flagship Arab Light crude in Asia by 30 cents a barrel, raising prices for the third straight month. Traders polled ahead of the OPEC+ decision expected Arab Light prices to drop 43 cents a barrel.
Oil rallied as much as 8.4% on Monday, the most in more than a year, after an unexpected decision by the Organization of the Petroleum Exporting Countries and its allies to cut more than 1 million barrels in daily production from next month. Saudi Arabia, the cartel’s de facto leader along with Russia, agreed to cut output by 500,000 barrels a day.
The move blindsided the global crude market, prompting many banks to raise price forecasts, although some bears remain.
Since the beginning of this week, traders and refiners have been eagerly awaiting the release of official Saudi prices with expectations of a PSO hike. Some buyers were also worried about possible cuts in their Aramco cargo lifts, or so-called allocations, prompting them to start talking to other non-OPEC+ suppliers for replacements or alternative supplies.
Saudi OSPs for Asia (differentials from Oman/Dubai reference prices):
