Aramco may cut Arab Light crude's OSP to Asia for August

Saudi Arabia is expected to cut the price for flagship Arab Light crude in August after refining margins in Asia dropped to a two-year low, Reuters reported, citing trade sources.

The official selling price (OSP) for August Arab Light crude could fall by 20-40 cents a barrel to $1.70/$1.90 a barrel after July OSP had risen by 20 cents to $2.10 a barrel.

Meanwhile, a recovery in fuel oil margins and robust summer demand will support Arab Medium and Arab Heavy OSPs, leading to steady or higher prices in August.

Saudi Arabia has boosted supply to 10.70 million barrels per day (bpd) in June, up 700,000 bpd from May.

Saudi crude OSPs are usually released around the fifth of each month, and set the trend for Iranian, Kuwaiti and Iraqi prices, affecting more than 12 million barrels per day (bpd) of crude bound for Asia.

State oil giant Saudi Aramco sets its crude prices based on recommendations from customers and after calculating the change in the value of its oil over the past month, based on yields and product prices.