Saudi Arabia raised its official selling prices (OSPs) for its May shipments of crude oil to its Asian customers, following the recent surprise cut in OPEC+ production.
State-affiliated Saudi Aramco increased the selling price of its flagship Arab Light crude oil to Asia for the third month in a row, with the latest increase amounting to 30 cents a barrel. Oil traders had predicted, in a survey that preceded the sudden OPEC+ decision, that the price of Arab Light crude would drop by 43 cents per barrel.
Global oil prices jumped by 8.4% on Monday, recording the largest daily rise in more than a year, after the decision of the Organization of the Petroleum Exporting Countries (OPEC) and its allies to cut production by more than one million barrels per day, starting next month. This decision included the agreement of Saudi Arabia, which leads, along with Russia, the OPEC + coalition, to reduce its oil production by 500 thousand barrels per day.
This step shocked the global oil markets, prompting many banks to raise their price expectations, despite the presence of some speculators betting on its decline.
Oil refining traders and companies have been eagerly awaiting the announcement of the official Saudi prices since the beginning of this week, in light of expectations that the official selling price will be raised. Some buyers were also concerned about possible cuts in their shipments from Aramco, or so-called allotments, which prompted them to start reaching out to other non-OPEC+ suppliers for alternative supplies.
