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7 Mar, 2023 12:37

Saudi Arabia hikes oil prices for Europe and Asia

The move comes as the world’s top exporter of crude sees growing demand
Saudi Arabia hikes oil prices for Europe and Asia

Saudi Arabian energy giant Aramco has announced it will raise its shipping prices for Asia and Europe for April as it sees demand there picking up.

Aramco revealed on Sunday that prices for its flagship Arab Light crude will rise up to $2.50 a barrel above the regional benchmark, which is 50 cents more than the level for March. The official selling price for Arab Heavy, a medium sour crude containing more sulphur than Arab Light, will be raised by $2.50 a barrel from March.

It’s the second month in a row that the world’s largest oil company has increased prices for its biggest market, Asia. Aramco sells around 60% of its crude shipments to the continent, most of them under long-term contracts, pricing for which is reviewed every month.

The Saudi producer also said that prices for North-West Europe and the Mediterranean will be hiked by as much as $1.30 a barrel while those for US customers will be left unchanged.

“The demand from China is very strong,” Aramco’s chief executive officer Amin Nasser told Bloomberg last week, adding that demand is also “excellent” in Europe and the US.

China has been ramping up crude purchases just as the country is rapidly recovering from Covid restrictions. According to the International Energy Agency (IEA), recovering Chinese consumption will be the main driver in the growth of global oil demand this year, which it expects to rise to 101.9 million barrels per day (bpd).

Meanwhile, the OPEC+ group of major oil-producing nations, led by Saudi Arabia and Russia, has recently suggested it will not increase production until at least next year. Russia announced earlier that it would cut oil production by 500,000 bpd starting March, in response to Western sanctions and price cap on its crude.

Oil prices started the week in decline, with benchmark Brent down slightly on Tuesday around $85 a barrel. US West Texas Intermediate crude was also trading lower, below $80 per barrel.

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