SINGAPORE: Top oil exporter Saudi Arabia may raise prices for most of the crude grades it sells to Asia in June to their highest levels in five months after Middle East benchmarks strengthened this month, trade sources said on Monday.

The June official selling price (OSP) of flagship Arab Light crude may rise by 70 to 90 cents to close to a $3 per barrel premium to the average of Dubai and Oman quotes, seven refining sources said in a Reuters survey, which would be the highest level since January.

The price hikes would track a wider backwardation for the first and third month for Platts Dubai and DME Oman at 83 cents and 96 cents, respectively, so far this month versus last month’s average, Reuters data showed.

Prompt prices are higher than those in future months, indicating tight supply.

Most respondents expect June OSPs for Arab Medium and Arab Heavy to rise on par with Arab Light, supported by tight supply amid OPEC+ cuts and robust fuel oil margins.

Abu Dhabi National Oil Co (ADNOC) has started processing Upper Zakum crude at its revamped Ruwais refinery, reducing exports of the medium sour grade.

However, Mexico’s Pemex is reversing crude export cuts of at least 330,000 barrels per day (bpd) planned for May amid lower-than-expected oil demand from its domestic refineries, which has partially eased tight supply.

The change in ADNOC’s refinery feedstock has led to record Murban crude exports in April of 1.65 million barrels per day, Kpler data showed, which has depressed light sour crude prices.

Strong light crude supply and weak naphtha margins are expected to limit price rises for Arab Extra Light to 30-50 cents in June, lagging gains by other Saudi grades, respondents to the Reuters survey said.

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Saudi crude OSPs are usually released around the fifth of each month, setting the trend for Iranian, Kuwaiti and Iraqi prices and affecting about 9 million barrels per day (bpd) of crude bound for Asia.

State producer Saudi Aramco sets its crude prices based on recommendations from customers and after calculating the change in the value of its oil over the preceding month, based on yields and product prices.

Saudi Aramco officials as a matter of policy do not comment on the kingdom’s monthly OSPs.