Saudi Arabia is likely to reduce prices of crude oil by $4.50 per barrel during October due to a fall in the region’s oil prices caused by weak gasoline demand and rising arbitrage shipments, reported Reuters.
The official selling price has reached a high level of $10.94 per barrel till September, however, due to the causes, a drop in Saudi Aramco’s trademark Arab Light crude is expected after a wait of four months.
With the increase in the spot premiums for regional benchmarks Dubai, Oman, and Murban in August and the narrowing spread between Dubai- and Brent-linked grades, the demand for Middle Eastern crude oil has had a negative impact.
Saudi Arabia, the world’s largest oil exporter follows Dubai’s market structure, for which the price spread has decreased by approximately $4.26 per barrel in August.
Experts say that Asia’s demand is expected to decline with the inflow of cargo from the US and West Africa. Nevertheless, Saudi oil prices affect the pricing of more than 9 million barrels per day (bpd) of crude destined for Asia.
It is to be noted that Saudi Arabia announces its prices around the fifth of every month, and Iranian, Kuwaiti, and Iraqi prices are set according to the Saudi trend. The OPS in the Middle Eastern country is set on suggestions from clients as well as an analysis of the change in the oil’s value over the previous month using yields and product prices.