Saudi Arabia raises oil prices for Asia to record levels

SAUDI ARABIA raised oil prices for buyers in Asia into record territory, with the global market remaining tight despite signs of weakening demand as economies slow.

State producer Saudi Aramco increased its Arab Light grade for next month’s shipments to Asia to US$9.80 a barrel above the regional benchmark. That’s a jump of 50 cents from August. Traders and refiners had expected a bigger raise of US$1.50, according to a Bloomberg survey in late July.

The move came a day after OPEC+ – led by Saudi Arabia and Russia – responded to months of diplomatic efforts from the US for more oil with one of the smallest production increases in its history.

Oil prices still fell on Wednesday, with Brent dropping almost 4% to below US$100 a barrel, after data showing low gasoline consumption in the US and as production in Libya recovered.

Brent crude surged to around US$130 a barrel in the wake of Russia’s attack on Ukraine. But it’s since dropped amid growing concern about the possibility of recessions in the US and Europe.

Saudi Arabia is the world’s biggest oil exporter and sells most of its crude into Asia. Aramco’s monthly pricing decisions are seen as a bellwether of the oil market and are often followed by similar moves from other major Persian Gulf producers. – Bloomberg