Why is Saudi Arabia expected to sharply cut its August oil prices for Asia?

Saudi Arabia is expected to sharply cut its August official selling prices (OSPs) for crude oil to Asia due to a sharp deterioration in Middle East spot crude markets, driven by rising regional supplies—including resumed crude cargoes transiting the Strait of Hormuz after the ceasefire, increased offerings from the UAE, Iraq, Qatar, and anticipated higher Iranian exports following a temporary U.S. sanctions reprieve—as well as globally weakened physical differentials from West Africa, Brazil, and the U.S., all contributing to ample supply and downward price pressure.

What is the expected August OSP for Saudi Arab Light crude to Asia, and how does it compare to July's level?

The August OSP for Saudi flagship Arab Light crude is expected to fall to a premium of $1.5 to $3 per barrel above the average Dubai and Oman quotes—$6.5 to $8 per barrel lower than the July OSP—marking a four-month low, according to a Reuters survey of four industry sources.

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