Saudi Arabia has raised oil prices for customers in all regions as Russia’s invasion of Ukraine continues to ripple through markets.
State producer Saudi Aramco has raised its light Arabian crude for next month’s shipments to Asia to $9.35 a barrel above the benchmark it uses. That’s a jump of $4.40 a barrel from April, when the key rating was already at an all-time high. The energy company was expected to raise prices by $5, according to a survey of traders and refiners.
Oil soared to over $100 a barrel following the Moscow attack, which rocked financial markets around the world. Many buyers avoid shipments from Russia. Flows from the country could decline by 1 to 3 million barrels per day until the third quarter, according to Vitol Group, the world’s largest independent crude trader.
Aramco, the world’s largest oil company, made its decision after OPEC+ opted on Thursday to continue ramping up production gradually. The group of 23 countries, led by Saudi Arabia and Russia, resisted calls from major importers, including the United States, to accelerate production increases and lower global fuel prices.
“It’s a massive increase,” said Giovanni Staunovo, commodities analyst at UBS Group AG. “Additional volumes from Saudi Arabia will only come at a high price.”
The Saudi rise – likely to set the tone for other Middle Eastern grades – comes despite a series of virus lockdowns in China, the main oil importer.
Other Asian grades rose at least $2.70 a barrel, while all US prices rose $2.20. US Arab light will jump to a premium of $5.65 a barrel, also a record high.
More than 60% of Saudi Arabia’s oil shipments go to Asia, with China, Japan, South Korea and India being the biggest buyers.
–With help from Sherry Su.