Saudi Arabia Plans July Oil Price Cuts to Six-Month Low for Asia

Saudi Arabia is expected to lower its official selling prices (OSPs) for crude oil to Asian buyers in July, with the flagship Arab Light grade projected to drop by 40 to 50 cents per barrel to the lowest level since January. Other Saudi crude grades such as Arab Extra Light, Arab Medium, and Arab Heavy are also anticipated to see price reductions between 30 and 45 cents per barrel. This anticipated price cut reflects the impact of rising supply from OPEC+, which has increased production by nearly one million barrels per day across recent months and may add another 411,000 barrels per day in July. The supply hikes come amid global economic challenges, including a tariff war initiated by the U.S., which have contributed to weaker demand and some unsold crude cargoes. The price adjustments by Saudi Aramco, which bases its OSPs on customer recommendations and recent market values, influence pricing for several Middle Eastern producers and affect approximately nine million barrels per day of crude bound for Asia. These developments underscore shifting market dynamics as increased crude supply meets cautious demand in key regions.