Saudi Aramco cuts Arab Light OSP for Asia to +$3.50/b

5 Dec 2023

Quantum Commodity Intelligence – Saudi Aramco has cut Official Selling Prices (OSPs) on its flagship Arab Light crude for January loading to Asia, in its first reduction since June of this year, while prices for Europe and the US were also reduced.

For Aramco's key customer base in Asia, differentials for the flagship Arab Light grade were reduced to Platts Dubai/DME Oman +$3.50/b, down from +$4/b in December. This was at the higher end of expectations after a crunch on spot premiums for Middle East grades last month, while the market structure has also been under pressure.

Arab Medium was reduced $0.65/b to +$2.75/b, while Arab Heavy was unchanged at +$1.70/b.

Arab Extra Light was set at +$3.55/b over Dubai/Oman versus +$4.05/b for December, which also came in slightly above expectations after gasoline cracks weakened.  

The key M1/M3 (Jan24/Mar24), which National Oil Companies use in OSP calculations, eased from +$1.65/b in November to an average of +$0.97/b for December, a move that typically signals a reduction in Asian OSPs.


Premiums for spot Middle East barrels have also declined, including Qatar's medium-sour Al Shaheen tender for January awarded at premiums +$1.60/b to +$1.75/b versus the underlying Dubai benchmark, down from an average of +$3/b on December cargoes.

Physical barrels were also under pressure as refining margins remained sluggish - hit by a slump in gasoil cracks - raising the prospect of run cuts. According to Quantum data, benchmark 10ppm gasoil averaged $106.57/b in December versus $117.48/b in the previous month.

The Quantum average price for Dubai was $83.54/b for January-loading barrels versus $89.78/b on December-loading crude, a fall of 6.95%, coming after a 3.8% drop in the previous month.

For Northwest Europe, Arab Light was set at +$2.90/b versus ICE Brent futures, compared to +$4.90/b on December-loading crude, while Medium was set at +$1.70/b versus +$3.70/b for October.

Arab Light for August to the US Gulf was set at +$7.15/b over ASCI (Argus Sour Crude Index) versus +$7.45/b in December, while Medium was at +$7.85/b and Heavy at +$7.40/b, both slightly lower on the month.