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Saudi Arabia may reduce the official selling price of its flagship Arab Light grade for Asian buyers further, according to analysts polled by Reuters.
The price cut, for July deliveries, would be some $1 per barrel, they said. According to Reuters, this would bring the price of Arab Light for Asian buyers to the lowest level in 20 months.
Saudi Arabia has cut the price of the oil it sells to Asian buyers several times already since the start of the year to secure market share in a region that has become the largest importer of Russian crude.
Last month, Aramco cut the price of Arab Light by $0.25 per barrel on a monthly basis, bringing it to a $2.55 premium to the Dubai/Oman spread per barrel.
Meanwhile, unnamed sources have told the Wall Street Journal that Riyadh has grown increasingly frustrated with Russia, which apparently hasn’t kept its end of the deal and isn’t reducing oil production as pledged, complicating the Saudi efforts to lift oil prices to at least the Kingdom’s oil price breakeven level of $81 per barrel.
So, officials from Saudi Arabia have expressed their frustration with Russia and have asked Russian officials that Moscow stick to its pledge to reduce oil production by 500,000 barrels per day until the end of the year.
Russia and Saudi Arabia are the unofficial leaders of the OPEC+ group, which surprised traders earlier this year when it announced additional production cuts to counter falling prices.
Russia separately said it would reduce its oil output by half a million barrels daily but this has not yet been reflected in the rate of its exports. As for production data, Moscow is no longer reporting official total output figures.
OPEC+ is meeting next week to discuss policy and many already expect that additional cuts would be announced.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.