Saudi Arabia may raise March crude oil prices for Asia

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SINGAPORE – Top oil exporter Saudi Arabia may raise prices of all grades of crude it sells to Asia in March on firm demand and stronger margins for gasoil and jet fuel, trade sources said.

The March official selling price (OSP) for flagship Arab Light crude could rise by about 60 cents a barrel from the previous month, according to seven refining sources surveyed by Reuters on Jan 25-26, which would mark a rebound after a $1.10 a barrel cut in February.

The anticipated price hikes for March supplies come after Middle East benchmarks strengthened this month. Asia’s crude demand has been robust as refiners’ margins stayed firm with the Omicron coronavirus variant having a smaller than expected impact on global fuel consumption so far.

Strong gasoil and jet fuel margins are expected to support bigger price hikes for light grades compared with heavier crude, traders said. , Saudi crude OSPs are usually released around the fifth of each month, and set the trend for Iranian, Kuwaiti and Iraqi prices, affecting about 9 million barrels per day (bpd) of crude bound for Asia.

State oil giant Saudi Aramco sets its crude prices based on recommendations from customers and after calculating the change in the value of its oil over the past month, based on yields and product prices.

Saudi Aramco officials as a matter of policy do not comment on the kingdom’s monthly OSPs.

Below are expected Saudi prices for March (in $/bbl against the Oman/Dubai average): FEB Change est.MARCH OSP

Arab Extra Light +3.20 +0.50/+0.80 +3.70/+4.00

Arab Light +2.20 +0.45/+0.80 +2.65/+3.00

Arab Medium +2.05 +0.25/+0.65 +2.30/+2.70

Arab Heavy +0.70 +0.30/+0.65 +1.00/+1.35

Reuters

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