Saudi Arabia raises oil prices for Asian buyers amid Middle East conflict
Shafaq News/Saudi Arabia has increased oil prices for its main buyers in Asia as crude oilmarkets face growing volatility, with traders closely monitoring developmentsin the ongoing Middle East conflict.
Saudi Aramcoraised the official selling price (OSP) for its flagship Arab Light crude by 90cents, bringing the premium to $2.20 per barrel over the regional benchmark forAsian buyers, according to a pricing list seen by Bloomberg.
This pricehike exceeded market expectations, as traders and refiners had anticipated anincrease of around 65 cents per barrel. Meanwhile, Aramco reduced prices forall grades destined for the US and Europe.
Oil priceshave surged since early October, following Iran’s missile strikes on Israel inresponse to the assassination of Hamas Leader Ismail Haniyeh and Hezbollah SecretaryGeneral Hassan Nassrallah.
Thebenchmark Brent crude has jumped by over 8% this week, trading around $78 perbarrel, amid fears of potential Israeli retaliation.
So far,global markets have largely disregarded the regional risks, as the conflict hasnot significantly disrupted supply flows. Instead, traders have been moreconcerned with weakening demand, particularly from China.
Amidconcerns about slowing oil demand in China potentially leaving excess crude inthe market, OPEC, led by Saudi Arabia and Russia, last month decided topostpone a planned production increase for two months, extending the freezeuntil early December.
In aseparate report, Newsweek indicated that Saudi Arabia is preparing to increaseoil production, a move seen as a potential blow to Russian President VladimirPutin and his efforts to fund the Russian war machine amid the invasion of Ukraine.
Experts toldNewsweek that this move by Saudi Arabia could put additional pressure on Russia’sbudget, complicating its efforts to sustain its military campaign in Ukraine.
In 2014,Riyadh resisted calls from some OPEC members to cut production to stop fallingoil prices, paving the way for a market share battle between OPEC and non-OPECproducers during a boom in US shale oil production.
