Saudi Arabia raised July crude prices for Asian buyers to a higher-than-expected level on concerns about tight supplies and expectations of strong summer demand.
Saudi Arabia, the world’s top oil exporter, raised July crude prices for Asian buyers to a higher-than-expected level amid concerns about tight supplies and expectations of strong summer demand.
The official selling price (OSP) for Arab Light crude oil loaded into Asia in July rose $2.1 a barrel to $6.5 a barrel from June, above the Oman/Dubai offer and just below the record high set in May.
That’s well above the $1.50 or so gains most markets are predicting. In a Reuters poll, only six respondents predicted a $2 rise.
“Prices rose unexpectedly, especially for Arab Light. We are baffled by the decision,” said an Asian oil trader.
Graphic: Saudi oil prices to Asia – https://graphics.reuters.com/SAUDI-OIL/PRICES/lbpgndxywvq/chart.png
National oil producer Saudi Aramco raised interest rates even as OPEC+ nations agreed to boost output by 648,000 bpd in July and in August to offset supply losses from Russia. That compares with a monthly increase of 432,000 bpd originally planned for the three months to September.
But growth is divided among member countries, including Russia, and hard-to-reach countries such as Angola and Nigeria, leading to fears that the actual increase in supply may fall short of official plans.
Northern hemisphere countries such as the United States typically start their driving season in July, leading to a surge in gasoline demand. China, the world’s largest oil importer, is also reopening some cities such as Shanghai after a prolonged COVID-19 lockdown.
“Demand is also very strong this cycle, and the Saudis have the ability to raise the OSP,” said another Asian oil trader.
Continued flows of Russian oil to China and India, which have refused to condemn Moscow’s invasion of Ukraine and have been ramping up buying Russian goods at low prices, could offset some demand for Saudi oil.
Moscow said it was conducting a “special military operation” to disarm Ukraine and protect it from fascists. Ukraine and Western countries see Russia’s claims as a pretext for aggression.
Aramco also raised its OSP for European and Mediterranean buyers late Sunday, but the U.S. spread remained unchanged.
Saudi Arabia priced Asia’s long-term crude supply at
Difference from Oman/Dubai average:
Ultralight 8.50 5.75 2.75
Ultralight 7.15 4.65 2.50
Light 6.50 4.40 2.10
Medium 6.15 4.35 1.80
Heavy 4.80 3.00 1.80
Prices for Ras Tanura Shipping to USA
For ASCI settings:
Ultralight 7.00 7.00 0.00
Light 5.65 5.65 0.00
Medium 4.95 4.95 0.00
Heavy 4.50 4.50 0.00
Prices for Ras Tanura Shipping to North West Europe
For ICE Brent:
Ultralight 6.80 5.60 1.20
Lighting 4.30 2.10 2.20
Medium 1.30 -0.10 1.40
Weight -2.60 -4.10 1.50
Saudi oil price in Ras Tanura
The Mediterranean will go to war with Brent:
Ultralight 6.80 5.60 1.20
Light 3.90 1.90 2.00
Medium 1.40 0.20 1.20
Heavy -2.80 -3.00 0.20
(This story has not been edited by NDTV staff and was automatically generated from the syndicated feed.)