Saudi Arabian Oil Co., the nation’s state-run oil company, raised its crude oil prices for Asia and Europe for August, as OPEC+ struggles to increase output.
Saudi Aramco raised the price of its benchmark Arab Light crude by $2.80 a barrel for Asian buyers to a premium of $9.30 a barrel compared to Oman and Dubai.
For its northwest European customers, Aramco has raised its May formula prices by $1.40-3.80/bl, while May prices for Mediterranean-bound exports have been increased by $0.60-3/bl on fob Ras Tanura terms and by $0.30-2.70/bl on fob Sidi Kerir terms. Market participants had expected Aramco to lift its prices for customers in the two regions. Many European buyers remain wary of purchasing Urals, which is increasing demand for alternative sour crudes.
In some places “the demand rebound is quite something,” Mike Muller, head of Asia at Vitol Group, said Sunday on a podcast produced by Dubai-based Gulf Intelligence. “A lot of the south-eastern Asian countries, where I’m based, are very much exceeding expectations in terms of road-transportation demand. And try buying an air ticket in Singapore in the summer holidays. It’s awfully tough.”
OPEC+ agreed on Thursday to accelerate output increases. The 23-nation cartel, led by Saudi Arabia and Russia, said it would add 648,000 barrels a day to the market in each of July and August, about 50% more than its moves in recent months.
Still, most analysts said the group is unlikely to meet its targets because many members, even aside from Russia, are struggling to pump more. Saudi Arabia and the United Arab Emirates are about the only OPEC+ nations with significant spare capacity.
Saudi Arabia sends more than 60% of its crude exports to Asia, with China, Japan, South Korea and India being the biggest buyers.