Oil in Global Economy Series: Saudi Arabia raises OSP for Asian buyers

On the back of a stronger demand from Asian customers and strong Dubai benchmark, Saudi Arabia has raised its official selling price (OSP) to Asian customers. OPEC’s largest producer and exporter have lifted the price of its flagship Arab Light crude grade for Asian buyers by $0.40 a barrel for January compared to December. With this raise, the Saudi Arabia’s OSP to Asian customers will be at $1.65 per barrel over Dubai benchmark from January onwards. The Dubai benchmark is trading at $60.4 per barrel per day as of today. The Dubai benchmark is trading at $2.3 per barrel discount to the Brent benchmark. We expect Saudi Arabia to raise the price for Asian customers next year to $3 per barrel over Dubai crude.

According to data from Tankertrackers.com, in November, Saudi Arabia exported 76 percent of its total exports to Asian customers. It exported more than 18 percent to Japan, 17 percent to South Korea, 13.5 percent to China, 7.5 percent to Singapore, 6.8 percent to India, and 6 percent to Taiwan. Four other countries took up the rest. There has been strong demand from China and India for Saudi Arabia’s Arab light grade.