Saudi Arabia may cut oil prices for Asia in October 2024

Saudi Arabia, the largest oil exporter, is expected to cut prices for most grades of crude it sells to Asia in October 2024 after the Dubai benchmark fell sharply in July 2024, News.Az reports citing Neftegaz.RU News Agency.

The selling price of the flagship Arab Light crude is expected to fall by 50-70 cents per barrel in October.

The reduction will reflect the low profitability of refineries in China, where demand for fuel is declining amid weak economic growth. Even September, which is usually a month of high sales, could disappoint this year, the sources say.

OPEC + supplies are also set to rise from October 2024, with the eight-member group planning to raise output by 180,000 bpd next month as part of a plan to begin unwinding the latest round of 2.2 million bpd production cuts while keeping other cuts in place until the end of 2025.

Two other sources told Reuters that October Arab Light prices will be maintained. On August 5 , 2024, Saudi Arabia raised its Arab Light selling prices for Asia in September for the first time in three months, while cutting prices for other regions.

Saudi Arabia's heavier grades of crude (Arab Medium and Arab Heavy) could fall by less than $0.50 a barrel in October, thanks to robust fuel oil demand, although a couple of sources expect a 60-80 cents a barrel cut.

The Kingdom traditionally publishes selling prices for its crude grades on the 4th and 5th of each month for the following month. Saudi Arabia's oil pricing policy serves as a benchmark for other Middle Eastern suppliers.

State-owned Aramco sets its oil prices based on customer recommendations and after calculating the change in the cost of its oil over the past month based on production figures and the prices of petroleum products.

News.Az