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Saudi Aramco Expected to Maintain Crude Oil Prices for Asia in April

Saudi Arabia is anticipated to announce minor adjustments to the price of its crude oil heading to Asia in April, a Reuters survey of refiners showed on Friday.

The world’s leading crude oil exporter, Saudi Aramco, is likely to maintain the price of its flagship Arab Light grade for Asia next month, either keeping it unchanged or increasing it slightly by up to $0.20 per barrel over the Oman/Dubai average, which serves as the benchmark for pricing Middle Eastern crude exports to Asia.

The survey, which involved six refining sources, revealed this expectation.

Traditionally, Saudi Arabia announces its official selling prices (OSPs) for the following month around the fifth of each month without providing commentary on the pricing.

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This month, the announcement of April’s crude oil prices could coincide with the OPEC+ decision on extending existing production cuts, which was anticipated in early March. Market analysts foresee an extension of the current cuts into the second quarter of 2024.

In the previous month, Saudi Arabia maintained the price of Arab Light for March unchanged for Asia compared to the February price, at $1.50 a barrel over the Oman/Dubai average.

The present premium of Arab Light over the Middle Eastern benchmark is the lowest it has been in over two years. Aramco is expected to adhere to this pricing strategy, especially as the Dubai market structure has strengthened, and the Saudis aim to redirect more barrels to Asia amidst disruptions to oil shipping in the Red Sea for barrels destined for Europe and the Mediterranean.

One of the refining sources participating in the survey commented to Reuters, stating, “The market structure and product cracks didn’t change too much compared to last month, and I think now with Red Sea shipping still having uncertainty… probably they will want to push the barrels to Asia.”

The survey also indicates that Saudi Arabia is anticipated to maintain the prices of its other crude grades to Asia relatively unchanged.

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