Saudi Arabia Cuts Oil Prices to Asia by More than 50%

Saudi Arabia Cuts Oil Prices to Asia by More than 50%

Saudi Arabia cut oil prices for buyers in Asia as coronavirus lockdowns in China weigh on demand, countering uncertainty around Russia’s supplies as the Ukraine war drags on.

Aramco is expected to cut the official selling price (OSP) for flagship Arab Light crude to Asia in June by more than 50 percent.

The state-controlled company dropped its key Arab Light crude grade for next month’s shipments to Asia to $4.40 a barrel above the benchmark it uses, from $9.35 in May.

Saudi Arabia raised its prices to record levels in the past two months after crude futures surged above $100 a barrel when Russia invaded Ukraine. Russian flows have already fallen and may drop further as the European Union moves closer to formally sanctioning energy supplies from the country.

While the war has tightened the global oil market, Beijing’s Covid Zero strategy has led to China’s largest demand shock since the early days of the pandemic.

Saudi Arabia sends more than 60 percent of its crude exports to Asia, with China, Japan, South Korea and India being the biggest buyers.

Oil prices rose nearly 1.5% on Friday, posting a second straight weekly increase.

Brent futures rose $1.49, or 1.3 percent, to settle at $112.39 per barrel. US