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Aramco increases oil prices for July

saUDI arabIa sAUDI Aramco on June 7 increased its July set at minus 10 cents pb to the Dubai and Oman
crude export official selling prices across the average, up $5.60 pb from June, and Arab Heavy
board, for all regions and grades, a day after heaving to Northwest Europe at ICE Brent
OPEC and its allies agreed to continue historic minus 50 cents pb, up $3.90 pb.
production cuts for another month. Riyadh has said it would reduce its crude
The saudi oil giant, whose monthly pricing output in June by 1 million barrels per day, more
is one of the most closely watched data points than its commitment under the OPEC+ pact.
on the global market, had delayed the release of Aramco has also raised the July OsP of its
its OsPs pending the result of the June 6 OPEC+ Arab light crude oil to the United states, setting
meeting, which ended with an extension of the it at a premium of $1.35 per barrel over AsCI
coalition’s 9.6 million bpd output cut agreement (Argus sour Crude Index), up $0.60 a barrel
through July. The cuts had been scheduled to roll from June, the document showed.
back to 7.7 million bpd at the end of June. Aramco also increased its OsP for Arab light
Under the deal, saudi Arabia will hold its crude oil to Northwestern Europe to plus $0.30
crude production to 8.49 million bpd. a barrel over ICE Brent, up $4 from the previous
Aramco, the world’s largest exporter of crude, month. The hike in the OsPs may discourage
has typically released its month-ahead OsPs by more demand for saudi crude, and would force
the first five days of the previous month. other Gulf oil producers to follow the increase
state oil giant saudi Aramco has raised the in pricing. saudi crude prices set the trend for
July price for its Arab light crude to Asia to plus Iranian, Kuwaiti and Iraqi prices, affecting more
$0.20 a barrel (pb), up $6.10 from June, it said in than 12 million barrels per day (bpd) of crude
a statement on sunday. This increase was more bound for Asia.
than the $3.80 expected. The sharp price increases show that saudi
The steepest jump will hit July exports to Asia, Arabia is using all the tools at its disposal to turn
state producer saudi Aramco’s largest regional around the oil market after prices plunged into
market. Overall, the increases for saudi crude negative territory in April.
erase almost all of the discounts the kingdom But the profits that oil refiners make from
made during its brief price war with Russia processing crude into fuel are struggling to keep
up with the rising market, and the sharp saudi
Discount pricing price hikes are likely to exacerbate that problem.
Of all the 17 prices listed in Aramco’s statements, Representatives for refineries from Europe and
only two were still at discounts to their respective Asia expressed concern and said the pricing
benchmarks. Arab Heavy heading to Asia was would crush margins.™

Week 23 10•May•2020 www. NEWSBASE .com P9