- Saudi Arabia again raised the price of its oil to Asia.
- The Kingdom will increase its official sale prices in all regions except the United States.
- The move is a sign that Saudi Arabia is seeing robust demand throughout the summer.
Saudi Arabia again raised the price of its oil to Asia in August on Tuesday to approach record differentials, in a widely expected move that follows strong refining margins and expectations of robust demand.
Saudi Aramco announced on Tuesday that it was raising its official selling prices (OSP) in all regions except the United States, where no changes were made to differentials.
The price of Saudi Arabia’s flagship Arab Light crude oil to Asia in August was lifted $2.80 a barrel to $9.30 a barrel from the Dubai/Oman benchmark, from which the price of crude from the Middle East to Asia is fixed. That matched a Bloomberg survey of refiners and traders last week, and slightly above the average $2.40 a barrel increase expected by traders and refiners in a Reuters poll.
Arab Light’s August price of $9.30 over Dubai/Oman is only five cents away from the record $9.35 per barrel premium spread over early Oman/Dubai of this year.
The Saudis also raised prices for all other grades for Asia in August, with Extra Light at a record premium. Aramco announced smaller price increases for Extra Light, Arabic Light and Medium in both the Mediterranean region and North West Europe. All prices for the US market remain the same as last month, according to Aramco price table shared by Amena Bakr, chief OPEC correspondent and deputy bureau chief at Energy Intelligence. Related: New ESG rules are hurting US farmers
Saudi Arabia, which sets the price trend for most Middle Eastern oil exporters, typically announces its prices around the fifth of every month and as a matter of policy it does not comment on price movements.
The market took the rise in prices as a sign that the world’s top crude oil exporter expects robust demand this summer despite growing fears of a recession that could dent demand.
By Tsvetana Paraskova for Oilprice.com
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