Saudi Arabia raised its main oil prices for buyers in Asia amid heightened volatility in the crude market as traders watch developments in the Middle East conflict.
State producer Saudi Aramco increased the official selling price of its main Arab Light crude grade by 90 cents to a premium of $2.20 a barrel against the regional benchmark for buyers in Asia, according to a price list seen by Bloomberg. The company was expected to boost the premium by 65 cents a barrel, according to a survey of traders and refiners.
At the same time, Aramco cut the price of all grades to the US and Europe.
Oil has jumped since the start of October as Iran launched missile strikes on Israel in retaliation for devastating attacks in Lebanon that almost wiped out the leadership of Hezbollah. Benchmark Brent crude gained about more than 8% this week amid the strikes and in anticipation of a potential Israeli reprisal, to trade around $78 a barrel.
Until now, the markets have shrugged off most of the regional risks so far this year as conflict didn’t curtail supplies and traders focused instead on deepening worries about soft demand. Amid concerns that sluggish oil use in China will leave extra crude in the market, the OPEC+ alliance — led by Saudi Arabia and Russia — last month paused a planned output hike for two months, until the start of December.
Group members that made voluntary output cuts won’t go ahead with a previous plan to begin rolling back those reductions in October and November. The delay in starting to bring back barrels could leave Saudi Arabia exporting less than 6 million barrels a day, as it has for the past four months.