Benchmarks dip as market assesses Russian crude sanctions; Saudi cuts OSPs

Middle East crude benchmark Oman, Dubai and Murban edged lower on Tuesday as traders assessed the impact of sanctions on Russian seaborne crude, while waiting for more countries to release their January oil prices.

"The market expects more Russian crude to ship to Asia in the coming months and compete with Middle Eastern crude, probably causing supply overhang," said a Singapore-based trader.

OSP

Saudi Arabia, the world's top oil exporter, cut the January official selling price (OSP) for its flagship Arab Light crude for Asian buyers to a 10-month low, on concerns over faltering demand and a potential increase in Russian competition.

The OSP for January-loading Arab Light to Asia was trimmed by $2.20 a barrel from December to $3.25 a barrel over Oman/Dubai quotes, state oil producer Saudi Aramco 663WB said on Monday.

SINGAPORE CASH DEALS

Cash Dubai's premium to swaps dipped 2 cents to $1.23 a barrel.

PRICES ($/BBL)

NEWS

Russia may reduce oil production but not by much, Deputy Prime Minister Alexander Novak was quoted as saying by the state-run TASS news agency on Tuesday.

Russia's January-November oil and gas condensate output rose 2.2% from a year earlier to 488 million tonnes, the Interfax news agency said on Tuesday, citing Deputy Prime Minister Alexander Novak.

Oil tankers formed a traffic jam off the coast of Turkey on day one of the West's price cap on Russian crude, with Ankara insisting on new proof of insurance for all vessels, the Financial Times reported on Monday.

Venezuela last month exported 619,300 barrels per day (bpd) of crude and fuel as a resumption of shipments to Europe and the restart of oil processing plants lifted sales by 16% over October, according to documents and Refinitiv Eikon data.

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