Saudi to Slash Crude Oil Prices of Barrels Exported to Asia

Industry sources said on Monday that top oil exporter Saudi Arabia is expected to cut prices for most of the crude grades it sells to Asia in October after Middle East benchmark Dubai slumped last month. Three of five refining sources said in a Reuters survey that the October official selling price (OSP) for flagship Arab Light crude is expected to fall between 50 and 70 cents a barrel, following a similar trend for Dubai price spreads last month.

Such a price cut would also reflect weak refining margins especially in China where sluggish manufacturing and property sectors are squeezing fuel demand, the sources said.

"Margins are bad now overall and worse in China," one of the sources said, adding that September, typically the best month for oil demand, could disappoint this year.

OPEC+ supply is also set to rise from October as eight of the group's members are scheduled to boost output by 180,000 barrels per day next month. This is part of a plan to begin unwinding their most recent layer of output cuts of 2.2 million bpd while keeping other cuts in place until the end of 2025.

However, another two respondents expect Arab Light's OSP for October to remain unchanged. One of them said this was partly because the Dubai benchmark had strengthened in the final week of trade last month.

For heavier grades - Arab Medium and Arab Heavy- three respondents expect October prices to be reduced by less than 50 cents, supported by robust fuel oil demand, while the remaining two expect price cuts of 60 to 80 cents a barrel.