Saudi Aramco Raises Crude Oil Prices to the U.S.

Saudi Aramco Raises Crude Oil Prices to the U.S. for February
By Nesa Subrahmaniyan
Jan. 7 (Bloomberg)

Saudi Aramco, the world's largest state oil company, increased its official selling prices for crude shipments to the U.S. for a second month in February.

The discount of Arab Light, the most common variety exported by Saudi Arabia, to Saudi Aramco's benchmark price narrowed to $4.15 a barrel from $6.85 a barrel in January, the Dhahran-based company said in a faxed statement on Jan. 5. Discounts for Extra Light, Arab Medium and Arab Heavy were also reduced. Aramco raised prices of Arabe Medium and Arab Heavy grades for Asian customers, while cutting them for Europe.

For U.S. customers, prices for all grades were raised by between $2.50 and $2.80 a barrel. Arab Extra Light's discount narrowed to minus $1.10 a barrel from minus $3.90 a barrel, Arab Medium to minus $7.45 from $10.05 and Arab Heavy grade to minus $10.75 from minus $13.25, Aramco said.

Prices to the U.S. are set as a discount to the West Texas Intermediate benchmark.

For Asian customers, Saudi Aramco cut its premiums for Arab Super Light, Extra Light and Arab Light by between 20 cents and $1 a barrel. Asian prices are quoted in relation to the average of Oman and Dubai grades, the two Arabian Gulf benchmarks used by Asian oil refiners and traders. Aramco started linking its prices to the average of Oman and Dubai crudes in 1986.

Aramco cut the premium for Arab Super Light by $1 to $6.05 a barrel, by 40 cents to $4.95 for Extra Light and by 20 cents to $1.55 for Arab Light. It narrowed discounts for Arab Medium by 10 cents to minus $1.75 a barrel and by 30 cents to minus $4.80 a barrel for its Arab Heavy grade.

Europe Shipments

Refiners in Europe and the Mediterranean would pay less for Saudi Arabian crude oil shipments in February.

For its Northwest European customers, Aramco widened Arab Light's discount to the benchmark by 25 cents to minus $3.15, Arab Medium was lowered to minus $5.70 and Arab Heavy reduced to minus $7.90, while Extra Light was cut to a premium of $1.20 from $1.55.

Oil refiners in the Mediterranean would pay between 50 cents and 70 cents less for their shipments from Saudi Arabia.

Mediterranean and European prices are expressed as a differential to Intercontinental Exchange's weighted average of North Sea Brent crude oil. All prices are free-on-board, where the buyer has to pay for shipping costs.

Saudi Aramco's most expensive oil variety is Arab Super Light and the cheapest is Arab Heavy.