Saudi Aramco increases Arab Light OSP for Asia to +$1.70/b

Quantum Commodity Intelligence – Saudi Aramco has increased its Official Selling Price (OSP) for the flagship Arab Light crude loading in April for customers in Asia, while differentials for Europe were trimmed.

For Aramco's key customer base in Asia, differentials for the flagship Arab Light grade were priced at Platts Dubai/DME Oman +$1.70/b, having been set at +$1.50/b in both February and March, which was the lowest OSP since November 2021.

This was largely in line with expectations, based on a firmer market structure and slightly higher spot premiums last month.

The higher OSPs also came after OPEC+ maintained the Q1 round of voluntary cuts into the second quarter, while a slowdown in Urals flows from Europe is expected due to longer shipping times as a result of attacks against tankers in the Red Sea.

Arab Medium was increased by $0.30/b to +$0.85/b, while Arab Heavy was also up by the same margin at parity. Arab Extra Light was up $0.20/b to +$1.70/b.  

The key M1/M3 (Apr24/Jun24), which National Oil Companies use in OSP calculations, was trading above the +$1/b mark for most of February, slightly up on the month, which typically signals an increase in Saudi OSPs.

Physical

Differentials for spot Middle East medium sour barrels such as Oman and Upper Zakum improved slightly during February, with selling indications comfortably above +$1/b to underlying Dubai swaps, while premiums have strengthened to around +$1.50/b in early March for spot cargoes loading in May.

Last month, the Quantum average price for Dubai was $80.89/b for April-loading barrels versus $78.85/b on March-loading crude, a gain of 2.6%, with the market again underpinned by geopolitical tensions along with Middle East producers wearing the bulk of OPEC+ cuts.

For Northwest Europe, the Arab Light OSP was reduced by $0.60/b to +$0.30/b versus ICE Brent futures, while Medium was also cut by the same margin to -$0.40/b, reflecting the relatively firmer Brent market.

Arab Light for April to the US Gulf was set at +$4.75/b over ASCI (Argus Sour Crude Index), while Medium was at +$5.65/b and Heavy at +$5.30/b, all slightly lower on the month.