Source: Saudi Aramco. For the second time in a row, Saudi Aramco has increased all its official selling prices, regardless of the respective continent. April OSPs to Asia rose $ 2.15-2.70 a barrel due to Dubai’s reversal, which was a record as Dubai M1-M3 spreads above $ 4 a barrel. almost $ 2 a barrel higher than last month. Saudi Arabia’s main export streams – light, medium and heavy – all jumped the same $ 2.15 a barrel, breaking all-time highs. While Saudi Arabia, in general, is still a long way from restoring total crude production to pre-pandemic levels, its exports to Asia have already moved there, hovering around 5.7 million b / d this month. Looking ahead, as Dubai’s prospective structure escalates further, May 2022 OSPs will inevitably see another month-on-month increase. For Asian countries that, unlike India and to a lesser extent China, are reluctant to buy Russian barrels at a big discount, spring will bring plenty of refining room as they are forced by the market to continue buying crude oil. Middle East. Chart 2. Official selling prices of Saudi Aramco for US cargo (against ASCI). Source: Saudi Aramco. Looking back, those who decided to maximize their ADNOC term nominations for April 2022 will be rewarded with an official sale price that looks more than delicious in the current circumstances. Based on the monthly average of Murban futures trading based on Singapore, the UAE national oil company ADNOC set the April price of the Emirates flagship at $ 93.99 a barrel, almost $ 9 a barrel, but is another way to reach current pricing levels. Inevitably, today’s deals will turn out to be completely bad in terms of pricing – IFAD Murban was almost on par with ICE Brent for the first two decades of March – when unchanged oil price expectations finally fall. ADNOC also dropped Upper Zakum’s difference to the biggest discount on Murban since it traded at IFAD, at $ 2.05 a barrel in April, up 50 cents from March. This could be a reaction to the Urals, a direct counterpart to Zakum, making tangible invasions of India and China, or also a reflection of their growing availability – March exports so far averaging 950,000 b / d, the higher than the export paranoia of April 2020. Chart 3. Official ADNOC selling prices for April 2022 (fully set here against the Oman / Dubai average). Source: ADNOC. Following in the footsteps of Saudi Aramco, Iraqi state-owned oil trading company SOMO also increased all April loading formula prices. SOMO’s pricing strategy in Asia is particularly interesting as the Iraqis increased Basrah Medium and Basrah Heavy by $ 2.20 a barrel and $ 2.00 a barrel, respectively. In the case of Basrah Medium, this means that the change from month to month was marginally higher than that of its peers in Saudi Arabia. However, this is only part of the equation as SOMO bids its cargoes on the basis of Dated Brent, which in the current period of unprecedented setback amounts to many dollars against the futures contract of ICE Brent, the pricing base of Saudi Aramco. If Iraq wanted to create a personalized solution that reflects this trend, it should have reduced prices instead of raising them in the same way that Saudi Aramco did, implying that Baghdad expects the current market tightness to remain. in force for quite some time, such as the profitability of Atlantic Basin inputs. Chart 4. Official Iraqi selling prices for Asian cargo (versus Oman / Dubai average). Source: SOMO. Production issues could help explain (in part) Dynamic SOMO pricing, with the West Qurna-2 game taking several weeks of field maintenance. The original plan was to shut down the field for 21 days in order to upgrade West Qurna-2 to 450,000 b / d, however, apparently stock levels in the field fell to critical levels and the Iraqi authorities resumed the field by March 10th. Whether the West Qurna-2 is now upgraded or not, there does not seem to be any official confirmation, what we know for sure is that Iraq’s crude oil production this month will reflect this chaos. Outflows to Europe, meanwhile, appear to have been hit hard by the weakest availability in Iraq – so far in March, only seven shipments have been loaded in Europe, about a third of that number in February.
Chart 5. Official Iraqi selling prices for European cargo (against Brent Dated). Source: NIOC. Iran’s national oil company NIOC was slow to release its official selling prices in April 2022, almost two weeks after Saudi Aramco did so, no doubt driven by the prospect of a possible deal that nevertheless witnessed another hiccup. . NIOC was pricing its cargoes for light and Iranian heavy cargoes going to Asian buyers more advantageously than its Saudi counterpart, raising its April OSP by $ 2.05 a barrel and $ 1.95 a barrel, respectively. That said, Iran appears to have cut crude crude exports in recent times, following growing rumors of a possible JCPOA deal. Having peaked in December 2021 at around 850,000 b / d, Iranian outflows have lost steam so far this year, dropping about 100,000 b / d from these levels. Exports continue to be dominated by markets from Asia (ie the usual route of initial shipment to Malaysia, to be transported from there to China), with a steady flow of crude to Syria. Chart 6. Official selling prices of Iran for cargo destined for Asia (against ICE Bwave). Source: NIOC. As for the Iranian nuclear deal itself, last month’s developments were an emotional train. Russia first sought to overthrow a budding deal by seeking guarantees, mainly from the United States, that it would be free to trade and trade with Iran if a new nuclear deal were reached. Long-term consultations followed, and just when it appeared that the overall momentum had stalled, Moscow apparently received these guarantees. By that point, Iran had already released the political prisoners it was holding in Tehran, so a revival of the treaty seemed a real possibility. Since then, however, the parties have resorted to mutual accusations, indicating that at the moment there is primarily a lack of political will to reach an agreement. Chart 7. Kuwait Official Sales Prices for Asian Cargo (vs. Oman / Dubai Average). Source: KPC. Kuwait, whose production and total exports have been relatively stagnant since November 2021, has traditionally reflected Saudi Aramco’s moves, although it increased its mainstream KEB OSP Asia by $ 2.25 in April 2022 for Asia. the barrel (ie 10 cents per barrel more). . With KEB priced at $ 4.80 a barrel against Oman / Dubai’s monthly average, Kuwait will also see record differences next month – the same goes for Kuwait’s 75,000 b / d KSLC marginal flow as the Ultra-light crude was set at a $ 5.95 a barrel higher than Oman / Dubai, the highest level since the class began trading. At the same time, Kuwait’s top executives at KPC Petroleum have seen some changes recently, with Sheikh Nawaf al-Sabah being named the new CEO – although after more than 20 years at the company, such corporate reshuffles are unlikely. changes in the overall policy of the CCP. By Gerald Jansen for Oilprice.com More top readings from Oilprice.com: