The largest exporter of crude in the world, Saudi Aramco cut its pricing for sales in May of Arab Light oil to Asia as producers prepare to meet to discuss a possible freeze on output in Doha.
Saudi Arabian Oil, which is state-run, widened its discount to Asia for Arab Light by 10 cents per barrel to 85 cents less than the benchmark for the region, said the company in a statement Tuesday that was emailed.
The price matches the expectations of traders polled.
Brent crude has dropped close to 50% since a 2014 decision, led by Saudi Arabia, from the Organization of Petroleum Exporting Countries of maintaining their production amidst a global glut in supply in order to protect market shares and to drive out producers who have higher costs.
Saudi Arabia as well as other members of OPEC will be meeting April 17 with Russia in Doha so they can discuss a proposal that would freeze the output of oil to stabilize its price.
Saudi Arabia has said it would freeze its output only if the same is done by Iran. Saudi Arabia’s oil output increased to over 10.2 billion barrels per day during February, while the output of Iran increased to over 3.22 million barrels per day from just 3 million per day, showed data from the International Energy Agency.
Russia’s production reached 11.2 million barrels per day during February showed data.
Saudi Aramco has increased its discount to Asia for Arab Heavy crude by 35 cents per barrel. It is now $3.65 below the benchmark according to an official statement.
Oil producers in the Middle East are competing more and more with cargos out of North Africa, Latin America and Russia for Asia buyers, which is its largest market.
Persian Gulf producers sell mainly under contracts of long term to refiners.
The majority of the state oil companies in the Gulf prices crude of their own at a discount or premium to the benchmark.
For Asia, this benchmark is an average of the Dubai and Oman oil grades.