By contrast, the United Arab Emirates was allowed to raise output targets by around 200,000 bpd to 3.22 million bpd, keeping supplies from Abu Dhabi National Oil Co (ADNOC) ample in Asia.

The switch in supplies could boost spot prices and improve demand for grades such as ADNOC’s flagship Murban and Upper Zakum crude which make up the bulk of the emirate’s exports, traders said.

Saudi Aramco has set the OSP for flagship Arab Light crude $2 a barrel higher than the Dubai benchmark, a trader with a North Asian refiner said, defying expectations of price cuts.

The price for Saudi’s Arab Extra Light crude is about $1 a barrel higher than the OSP for similar quality Murban, the trader said.

Asian buyers are likely to reduce the volume of Arab Medium crude and also possibly Arab Light when nominating July-loading supplies, traders said, which would be in line with Saudi Aramco’s pledge to deepen its production cuts.

Profits at a typical Singapore refinery processing Dubai crude averaged $4.78 a barrel in May, less than half of the $10.42 a barrel in January.

While China and India have the option of buying cheaper Russian oil instead of Saudi crude, other Asian refiners may not have the flexibility to do so, traders said.
Source: Reuters (Reporting by Muyu Xu and Florence Tan; Editing by Sonali Paul)