Asian refiners face rising crude oil costs on OPEC+ cuts

Asian refiners face rising crude oil costs on OPEC+ cuts

SINGAPORE - Middle East spot crude prices are climbing on expectations of tighter supplies ahead of peak fuel demand in the northern summer, squeezing Asian refiners' margins and prompting them to secure supplies from other regions, traders and analysts said.

Middle Eastern crude benchmarks Oman, Dubai and Murban have recovered in April back to early March levels after the Organization of the Petroleum Exporting Countries (OPEC) and allies, known as OPEC+, caught the market off guard by announcing further output cuts from May to the rest of the year.

State oil giant Saudi Aramco also unexpectedly raised official selling prices (OSPs) in May, making the bulk of Asia's term purchases more expensive even as it fully met Asian refiners' crude requirements.

Some refiners turned to the spot market for more oil and pushed up prices for sour grades from Qatari al-Shaheen, Abu Dhabi's Upper Zakum, Das and Murban, traders said.

Firm demand from Asian refiners pushed up the May term price of Qatari al-Shaheen crude to $2.37 a barrel over Dubai quotes, up from about $2.01 a barrel in the previous month, traders said, after Malaysia's Petronas and PetroChina were awarded cargoes in a tender.

The al-Shaheen price is closely watched by the market as