Aramco Delays April Oil Pricing as OPEC Leaves Market in Limbo

(Bloomberg) -- Saudi Aramco is delaying the release of its monthly crude-pricing announcement, an exceptional step by the world's biggest oil exporter, as it waits to see if the OPEC+ alliance will deepen cuts in global output.

Aramco plans to announce on Saturday the official pricing for crude that will be exported in April, according to people with knowledge of the situation. It had planned to issue the pricing on Thursday, said the people, who asked not to be identified since the information is confidential.

The state producer typically publishes its monthly pricing on the 5th of each month, and it hasn't missed that target for at least a decade, according to Bloomberg's stories on the pricing decisions. Aramco's media office didn't immediately respond to an emailed request for comment on the delay.

The Organization of Petroleum Exporting Countries decided Thursday to cut its production by an additional 1 million barrels a day in the second quarter, with a further reduction of 500,000 barrels to come from non-OPEC allies including Russia. OPEC+ is to meet on Friday, and without a firm agreement by the coalition, it's not clear how much oil Saudi Arabia, OPEC's biggest producer, will pump next month.

The pricing decision affects about 14 million barrels a day of regional oil exports since other Persian Gulf producers often follow Aramco's lead in setting prices for their own shipments. Middle Eastern producers sell much of their oil under long-term contracts, setting what are known as official selling prices, or OSPs, to let customers know what they'll pay for future cargoes.

Since producers take into account the availability of their crude relative to demand when calibrating OSPs, the lack of an OPEC accord leaves the company's marketers in the dark over volumes and pricing.

The delay highlights the conflict between Aramco's status as a publicly listed company and one that is still state controlled and beholden to government decisions when determining output. Aramco sold 1.5% of its shares on the Riyadh stock exchange in December in the world's largest initial public offering.

To contact the reporter on this story: Anthony DiPaola in Dubai at adipaola@bloomberg.net

To contact the editors responsible for this story: Nayla Razzouk at nrazzouk2@bloomberg.net, Christopher Sell, Bruce Stanley

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