Saudi Arabia Cuts August Arab Light Asia OSP, Biggest Drop in over 2 Decades

Saudi Arabia has ​set the August ⁠official selling price (OSP) for its flagship Arab Light crude to Asia ‌at US$1.50 a barrel below the Oman/Dubai average, an US$11 cut from the previous month and ​the biggest drop in more than two decades, according to a Saudi Aramco pricing ​statement released ​on Monday.

Reuters data dating back to 2003 show the reduction is the largest on record. The August OSP is the lowest level ⁠since June 2020 and compares with a premium of US$9.50 a barrel in the previous month.

The cut exceeded forecasts in a Reuters survey conducted in late June, which had pointed to a premium of US$1.50 to US$3.00 a barrel.

Since then, ​spot crude ‌prices have fallen ⁠further as GCC producers ⁠increased supplies, adding to downward pressure on the market.

The company lowered the Arab ​Light OSP for Northwest Europe to a premium of US$0.85 ‌a barrel to ICE Brent, down US$15 a ⁠barrel from the previous month.

It also cut the price for North American customers to a premium of US$4.60 a barrel to ASCI, down US$8 a barrel from July.

Meanwhile, OPEC+ agreed a further increase in output targets from August, the group said in a statement on Sunday, adding to global supply at a time when oil prices are falling due to the gradual reopening of the Strait of Hormuz for oil exports.