Aramco Raises Light Oil Pricing to Asia, All Grades to U.S.

(Bloomberg) -- Saudi Aramco raised December pricing for sales of its light oil grades to Asia to their highest levels since 2014, just a day after announcing it will sell shares for the first time. The state-owned oil producer increased monthly pricing for shipments of all crudes to the U.S.

Aramco increased its official selling price for flagship Arab Light crude to buyers in Asia by 40 cents a barrel, to a premium of $3.40 over the Middle East benchmark. Four traders and refiners in a Bloomberg survey had expected pricing for the grade to rise by 25 cents a barrel to a premium of $3.25.

The producer on Sunday formally confirmed its intention to sell stock on the domestic exchange in Riyadh as early as next month, in what could be the world’s biggest initial public offering. Aramco and the Saudi government added sweeteners including lower taxes and the potential for higher dividends to attract investors.

Key Insights

• Pricing for light grades to Asia was probably increased on outlook for stronger demand in the region
  • Margins for refiners in Asia rose at the end of October, reaching nearly $11 a barrel and exceeding a six-month average of about $9
• Saudi light crudes were the grades most affected by Sept. 14 attacks on Aramco oil production and processing facilities
  • Aramco compensated for interruption of availability of lighter crudes by substituting heavy or medium grades from offshore fields
  • Company reduced December pricing for heavy, medium sales to Asia

Know More

• Premium for Asia sales of Arab Light crude, Aramco’s most plentiful grade, increased by more than expected, reaching the highest since January 2014
  • Premium for sales to Asia of Super Light grade reached $6.75 a barrel, highest since February 2014; Extra Light premium of $5.10 is biggest since January 2014
• Aramco increased pricing for all grades to Northwest Europe and Mediterranean region, as well as to U.S.

©2019 Bloomberg L.P.