Saudi Arabia has reduced its official selling price for Arab Light crude oil to Asia for July, setting it at $1.20 per barrel above the Oman/Dubai average. This marks a 20-cent drop from June and is the lowest price since May. Despite the cut, it was less than many analysts anticipated, as expectations ranged between 40 to 50 cents.
This pricing adjustment follows a decision by OPEC+ to increase oil output for the fourth consecutive month. Eight member countries agreed to boost production by 411,000 barrels per day in July, matching increases seen in May and June.
Analysts suggest the smaller price reduction is influenced by Saudi Arabia’s rising domestic demand for crude, especially during the peak summer months when more oil is used for power generation. This increased internal consumption may limit the amount available for export.
Saudi crude prices are significant because they influence oil rates from other regional exporters, including Iran, Kuwait, and Iraq, affecting roughly 9 million barrels per day headed to Asia.
This move highlights the balance Saudi Arabia maintains between supporting domestic needs and responding to shifts in global oil markets.