Saudi Arabia Raises Crude Oil Prices for Europe and Asia
Saudi Arabia, one of the world's largest oil producers, has raised crude oil prices for buyers in Europe and Asia. This move comes as the country continues to cut oil output, indicating optimism about future oil demand.
Troy D. Hanson
October 05, 2023
Saudi Arabia, one of the world's largest oil producers, has increased its crude oil prices for buyers in Europe and Asia. This move comes after the kingdom announced its plans to continue cutting its oil output by 1 million barrels per day until the end of the year.
Saudi Aramco, also known as Saudi Arabian Oil Co., has raised the prices of its benchmark Arab light crude by $1.50 per barrel for European buyers, $0.40 per barrel for Asian buyers, and $1.90 per barrel for buyers in the Mediterranean.
The price set by Saudi Aramco is considered a key indicator of how Saudi Arabia perceives the demand for oil. Increasing prices is typically seen as a sign of optimism.
The kingdom has reiterated its commitment to reducing oil supply throughout the year. This decision is supported by the International Energy Agency and the Organization of the Petroleum Exporting Countries (OPEC), which both predict market deficits due to these supply cuts and Russia's efforts in this direction as well.
Prices in the United States remain unchanged from October. However, buyers in the U.S. and other parts of North America will still pay a premium of $7.45 per barrel for Saudi crude compared to the Argus Sour Crude Index. In Asia, buyers will face an additional cost of $4 per barrel over the average of the Oman and Dubai oil price benchmarks.
European buyers will pay a premium of $7.20 per barrel over Brent prices, while Mediterranean buyers will pay a premium of $6.30 per barrel over Brent.
In conclusion, Saudi Arabia has increased its crude oil prices for Europe and Asia as it continues to cut its oil output, reflecting its optimism about the future of oil demand.