Saudi Oil Prices for Asia May Drop to Lowest Level in 6 Months in July
Saudi Arabia, the world’s largest oil exporter, might lower its crude oil prices for Asian buyers in July. If that happens, it would be the lowest price in six months, according to oil refiners interviewed by Reuters.
Oil Prices for Exports to Asia
Saudi Arabia may lower the price of its main crude oil, Arab Light, by 40 to 50 cents per barrel. This would bring the price to about 90 cents to $1 more than the standard market price, according to a survey of four Asian oil buyers.
The price cut is likely because global oil prices have dropped due to higher oil supply from OPEC+ countries. If this happens, it would be the lowest price for Arab Light oil since January, based on Reuters data.
Saudi Arabia usually sets its monthly oil prices around the 5th of each month. These prices influence other oil-exporting countries like Iran, Kuwait, and Iraq, and affect about 9 million barrels of oil sent to Asia daily.
For July, Saudi Arabia is also expected to lower prices for its other oil types—Arab Extra Light, Arab Medium, and Arab Heavy—by 30 to 45 cents per barrel compared to June.
These expected price cuts come as global oil prices are falling, following OPEC+’s decision to increase oil production by nearly 1 million barrels per day between April and June.
Saudi Aramco, the state-owned oil company, sets these prices based on customer input and changes in oil value, which depend on refining profits and product prices.
Oil Supply
Eight OPEC+ countries will meet on Saturday and may decide to raise oil output by another 411,000 barrels per day in July, according to sources. This increase comes while global economic growth is slowing down, partly because of trade tensions started by the US.
One survey showed that some oil shipments from the last month still haven’t been sold, showing weak demand.
More supply has pushed Middle East oil prices down. As of May 27, the extra cost of cash Dubai crude over futures dropped to $1.21 per barrel—45 cents lower than April’s average.
“The chance of more oil production from OPEC+ is holding prices down,” said Tim Waterer, a market analyst at KCM Trade.
He added that the market is already expecting more oil in June, and possibly July, which could keep prices low. However, if trade relations improve or tensions rise between the US and Iran, prices might go up again.
Oil Prices
On Wednesday, oil prices went up slightly. Investors were concerned about possible supply problems after the US stopped Chevron from exporting Venezuelan oil under a new rule.
Brent crude went up by 30 cents (0.5%) to $64.42 per barrel, and US WTI crude also rose 30 cents (0.5%) to $61.19 per barrel.
The US government gave Chevron permission to keep its assets in Venezuela, but not to export oil or expand operations there. Reuters reported this on Tuesday.
“The loss of Venezuelan oil from Chevron means US refineries will need more oil from the Middle East,” said Robert Rennie from Westpac bank.
President Trump canceled Chevron’s earlier license on February 26. In recent years, these licenses had helped Venezuelan oil production slightly recover, reaching around 1 million barrels per day.
Published: 28th May 2025
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