Riyadh - Mubasher: Saudi Aramco is expected to cut the official selling price (OSP) for its Arab Light crude oil to Asian markets in May, amid expectations of a decline of $ 1.50 to $2 per barrel compared to April, according to a Bloomberg survey of five traders and refiners .

Aramco cut its Arab Light crude oil prices for April shipments by 40 cents per barrel, setting the price at a premium of $3.50 to Oman and Dubai crudes. This is a larger cut than the previous forecast of a 15 cent decline.

This decision came despite relatively high Asian demand, as a result of the shrinking supply of Russian oil due to Western sanctions .

Survey participants' estimates of the expected reduction in the official selling price for May varied. Three participants predicted a reduction of approximately $2 per barrel, while others predicted a decline of between $ 1.50 and $1.80. One participant estimated a reduction of only $ 1.50 .

This comes amid weak Asian refining margins compared to February and March, coupled with subdued purchasing levels ahead of the region's refinery maintenance season. The eight OPEC + members, who had approved additional voluntary oil production cuts in April and November 2023, are also preparing to proceed with a gradual and flexible return to production, with 2.2 million barrels per day scheduled to return to the market starting April 1, 2025 .

In March, Aramco raised the price of its Arab Light crude oil by $ 2.40 per barrel, the largest increase since August 2022, exceeding expectations of only a $2 increase . This increase was a result of improved refining margins in Asia, rising premiums for Middle Eastern crude, and the impact of US sanctions on Russian oil, which prompted Asian refiners to seek alternatives, making Middle Eastern crude the more attractive option .

Aramco is expected to announce its official selling prices for the following month within the first five days of April, a move that is considered a key indicator of market trends in Asia, the company's largest oil market .