Dubai crude price slumps 10% in May, lowest average since 2021

31 May 2023

Quantum Commodity Intelligence – The May monthly average price for benchmark Middle East Dubai tumbled over 10% versus April, according to Quantum data, with sharp losses in the final week erasing earlier gains.

The Quantum average price for Dubai was 10.17% lower versus the previous month, averaging $74.93/for July-loading barrels versus $83.41/b on June-loading crude, as fears over a global economic slowdown intensify.

Oil markets started the month on a negative note as data revealed China's manufacturing activity contracted in April, but ultimately it was the US and the broader macroeconomic picture that dominated sentiment during May, including a 0.25% interest rate hike from the US Federal Reserve.

Prices stabilized in the second week of May and enjoyed a brief rally in the second-half of the month, as OPEC kept its global oil demand growth forecast steady at 2.33 million bpd, underpinned by China. Likewise, the IEA said demand is set to increase 2.2 million bpd this year, averaging 102 million bpd.

However, oil markets were left in a state of flux during the final week of May as the US attempted to finalize a deal to raise the debt ceiling and circumvent a damaging standoff and avoid a crippling default.

Dubai cash for July delivery was assessed at a 10-week low of $72.23/b for 31 May, having slumped 17% since the April high of $87.30/b, now standing $6/b below levels prior to the OPEC+ cuts announced at the start of April.

Focus switches to the next OPEC+ meeting in early June, its first gathering since the 1.15 million bpd output reductions announced in April sparked only a short-lived rally.

Russia’s output is likely to come under further scrutiny, as Moscow continues to pump and export crude volumes above agreed levels, which will be a key discussion point at this weekend's OPEC+ meeting in Vienna.


Premiums for physical barrels also faced strong downwards pressure, as flagship medium-sour grades loading in July, including Oman, Upper Zakum and Al Shaheen, tumbled to around two-year lows of under Dubai swaps +$1/b.

Meanwhile, the key M1/M3 Dubai cash spread, closely monitored by Saudi Aramco and other Middle Eastern NOCs, averaged $1.04/b so far in May compared to $1.78/b in April, which could prompt even deeper cuts.

A narrower M1/M3 typically signals a reduction in Official Selling Prices (OSPs), with traders anticipating a cut of at least $0.50/b in flagship Arab Light differentials from the current Dubai/Oman +$2.55/b.

Asia cash June Brent averaged $75.78/b over the month based on the 1630 Asia close, down 5.4% from last month's average of $83.57/b as heavier Middle East lost ground to the North Sea marker with improved gasoil and gasoline cracks.

As such, the Brent/Dubai cash spread crunched to an average $0.85/b last month, compared to $0.16/b in April.

US WTI averaged $71.78/b based on the 1630 Singapore July contract, down from $79.57/b the previous month for a loss of 8%, making it the top performer among global crude benchmarks.

For a full Dubai and crude oil pricing history, visit Quantum's pricing pages.