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Middle East Crude-Benchmark premiums rise despite Saudi OSP cut

Middle East crude benchmark premiums rose on Friday, with Murban and Oman benchmarks rising to their highest levels this week despite Saudi Arabia cutting its original selling price (OSP) to Asia.

Spot premiums for the three benchmark grades were in the narrower range of $1.66-$1.82 on Friday, compared with $1.59-$1.73 on Thursday.


Top oil exporter Saudi Arabia has cut the price for the flagship Arab light crude it sells to Asia in August to $1.80 a barrel above the Oman/Dubai average, Saudi Aramco said on Thursday.

That is down 60 cents from the July price of Oman/Dubai plus $2.40 a barrel. The drop is broadly in line with expectations as sources at Asian refineries had said the price may fall by 60 cents to 80 cents.

The price reduction for Asia, which accounts for about 80% of Saudi’s oil exports, underscores the pressure faced by OPEC producers as non-OPEC supply continues to grow, while the global economy faces headwinds.

Aramco sets its crude prices based on recommendations from customers and after calculating the change in the value of its oil over the past month, based on yields and product prices.

Saudi crude OSPs set the trend for Iranian, Kuwaiti and Iraqi prices, affecting about 9 million barrels per day (bpd) of crude bound for Asia.


Cash Dubai’s premium to swaps rose 9 cents to $1.82 per barrel.


Russia’s ESPO Blend oil ESPO-DUB exports from the far eastern port of Kozmino were revised up by 0.3 million metric tons to 4.2 million tons (1 million barrels per day) in July.
Source: Reuters (Reporting by Sudarshan Varadhan; Editing by Jan Harvey; Editing by Sohini Goswami)

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